SAMOA COMPANIES ACT 2001 - mcil.gov.ws€¦ · 222. Statutory demand 223. Court may set aside...

SAMOA

COMPANIES ACT 2001

Arrangement of Provisions

PART 1

PRELIMINARY

1. Short title

2. Commencement

2A. Interpretation

3. Overview

4. Act binds the Government

5. Public notice

PART 2

INCORPORATING NEW

COMPANIES

Division 1 – Incorporation

6. Application for

incorporation

7. Certificate of incorporation

8. Effect of incorporation

9. Registration as private

company or public company

Division 2 – Names

10. Name of company

11. Change of name

12. Direction to change name

13. Use of company name

Division 3 – Rules of

Incorporation

14. Adoption and alteration of

rules

15. Model rules

16. Contents and effect of rules

Division 4 –

Registered Office and Postal

Address

17. Registered office and postal

address

18. Change of registered office

and postal address

19. Requirement to change

registered office or postal

address

PART 3

SHARES

Division 1 – General

20. Legal nature of shares

21. No nominal value

22. Minimum number of shares

23. Rights and powers attached

to shares

24. Shares must not impose

liabilities on holder

Division 2 – Issues of Shares

25. Issue of initial shares

26. Issue of other shares

27. Time of issue of shares

Companies Act 2001 2

Division 3 – Distributions –

General

28. Distributions prohibited

unless solvency test satisfied

29. Recovery of improper

distributions

Division 4 – Dividends

30. Dividends

Division 5 – Acquisition of Own

Shares

31. Company may acquire its

own shares

32. Cancellation of shares

acquired by company

33. Enforcement of contract to

repurchase shares

Division 6 – Redeemable Shares

34. Redeemable shares

35. Redemption of redeemable

shares

Division 7 – Assistance by

Company in Purchase of its own

Shares

36. Financial assistance

Division 8 – Cross Holdings

37. Cross-holdings

Division 9 – Transfer of Shares

38. Transfer of shares

39. Transfer of shares by

operation of law

Division 10 – Share Register

40. Company to maintain share

register

41. Share register as evidence of

legal title

42. Power of court to rectify

share register

43. Trusts not to be entered on

register

44. Registration of personal

representative or assignee of

bankrupt

Division 11 – Share Certificates

45. Share certificates

PART 4

SHAREHOLDERS


46. A company must have at

least 1 shareholder

47. Liability of shareholders

48. Decisions that must be made

by shareholders

49. Decisions that may be made

by shareholders

50. Shareholder approval of

major transactions

51. Unanimous shareholder

approval

52. Shareholder written

resolutions

53. Shareholder meetings

Division 2 – Alteration of

Shareholder Rights

54. Alteration of shareholder

rights

55. Repurchase of dissenter’s

shares

Division 3 – Disclosure to

Shareholders

56. Annual report to

shareholders

57. Inspection of company

records by shareholders

58. Request for information held

by company


59. Company must provide

requested information

60. Reasons for refusing

information

61. Shareholder may withdraw

request

62. Court may order company to

provide requested

information

63. Investigation at request of

shareholder

PART 5

DIRECTORS

Division 1 – Powers and Duties

Sub-division A – Powers

64. Management of company

Sub-division B – Duties

65. Fundamental duties of

directors

66. Duty of directors to comply

with Act

67. Duty of directors to comply

with rules

68. Interest of director in

company transactions

69. Use and disclosure of

company information

70. Standard of care of directors

71. Obligations of directors in

connection with insolvency

72. Effect of unanimous

shareholder approval on

certain duties of directors

Division 2 – Liabilities

Subdivision A – General

73. Persons taken to be directors

for liability purposes

Sub-division B – Indemnities and

Insurance for Directors

74. Certain indemnities

prohibited

75. Company may indemnify or

insure directors

Sub-division C – Defences

76. Defences for directors

Division 3 –

Prohibition and Disqualification

of Directors

77. Persons prohibited from

managing companies

78. Court may disqualify

directors

79. Persons entitled to apply for

order under section 78

80. Notice of application for

order under section 78

81. Application of sections 82 to

84

82. Court may prohibit person

from managing companies

83. Notice of application

84. Liability for contravening

section 77, 78 or 82

Division 4 – Office of Directors

Sub-division A – Appointment

and Retirement of Directors

85. Qualifications of directors

86. Appointment of directors

87. Director ceasing to hold

office

88. Notice of change of directors

Sub-division B –Miscellaneous

89. Remuneration of directors

90. Proceedings of directors


PART 6

ENFORCEMENT

Division 1 – Injunctions

91. Injunctions to require

compliance with Act and

rules

Division 2 – Derivative Actions

92. Leave to bring proceedings

93. Who may apply for leave to

bring proceedings

94. Matters that Court must

consider

95. When leave may be granted

96. Procedural matters

97. Powers of Court

98. Costs of derivative action to

be met by company

Division 3 – Personal Actions by

Shareholders

99. Personal actions by

shareholders against

company

100. Personal actions by

shareholders against

directors

101. Representative actions

Division 4 – Prejudiced

Shareholders

102. Prejudiced shareholders

103. Certain conduct deemed

prejudicial

104. Alteration to rules by Court

Division 5 – Certain

Applications

105. Effect of arbitration clause in

rules

106. Application for relief by

Attorney-General

PART 7

ADMINISTRATION OF

COMPANIES

Division 1 – Dealing with Third

Parties

Sub-division A – Binding

Company

107. Authority to bind company

108. Attorneys

109. Validity of dealings with

third parties

110. Assumptions that may be

made by third parties

111. Transactions in which

directors are interested

112. Transactions entered into by

directors in breach of certain

duties

113. Effect on third parties

Sub-division B – Pre-

incorporation Contracts

114. Pre-incorporation contracts

may be ratified

115. Warranties implied in pre-

incorporation contracts

116. Failure to ratify

Division 2 –

Company Records

117. Company records

118. Form of records

119. Alternative locations of

records

120. Inspection of records by

directors


shareholders


public

123. Manner of inspection


Division 3 –

Documents to be sent to

Registrar and Shareholders

124. Annual returns

125. Registrar may send annual

return form to company

126. Other documents to be sent

to Registrar


shareholders

128. Other documents to be sent

to shareholders

Division 4 – Accounting and

Audit

129. Accounting records to be

kept

130. Financial statements to be

prepared

131. Application

132. Appointment of auditor

133. When auditor ceases to hold

office

134. Registrar may appoint

auditor on request of

shareholder

135. Qualifications of auditor

136. Statement by auditor in

relation to resignation or

removal

137. Auditor to avoid conflict of

interest

138. Auditor's report

139. Access to information

140. Auditor’s attendance at

shareholders’ meeting

PART 8

AMALGAMATIONS ETC

Division 1 –

Amalgamations

141. Amalgamations

142. Notice of proposed

amalgamation

143. Registration of

amalgamation proposal

144. Certificate of amalgamation

145. Effect of certificate of

amalgamation

146. Registers

147. Powers of Court in relation

to amalgamations

Division 2 –

Approval of Amalgamations,

etc., by Court

148. Interpretation

149. Approval of amalgamations,

etc.

150. When Court may approve

amalgamations, etc.

151. Initial Court orders

152. Court may make additional

orders

153. Copy of orders to be

delivered to Registrar

154. Application of section 209

PART 9

INSOLVENT COMPANIES

155. Unregistered company

charges void

Division 1 –Administrations

156. Purpose

Sub-division A – Beginning of

Administration

157. When administration begins

Sub-division B – How

Administrator may be Appointed

158. Appointment of

administrator

159. Directors may appoint

administrator

160. Liquidator or creditors may

appoint liquidator

161. Secured creditor may

appoint administrator


162. Appointment of

administrator not to be

revoked

163. Court may remove

administrator

Sub-division C – Notices

164. Notices given by

administrator

165. Notice given by secured

creditor

166. Requirements for notices

given under section 164 or

165

167. Notice of administration

Sub-division D – Investigation of

Company’s Affairs

168. Administrator to investigate

company’s affairs

169. Directors to deliver

documents to administrator

170. Directors to give

administrator statement of

company’s affairs

171. Directors must give

administrator other

information

172. Offence not to comply with

sections 169 to 171

Sub-division E –Administrator’s

Rights to Company Documents

173. Restriction on enforcement

of lien over company’s

documents

174. Delivery of company’s

documents held by secured

creditor

175. Notice to deliver company’s

documents to administrator


sections 173 to175

Sub-division F – First Creditors’

Meeting

177. Preparation for first

creditors’ meeting

178. Notice of first creditors’

meeting

179. Proceedings at first

creditors’ meeting


section 177 or 178

Sub-division G – Reports by

Administrators

181. Reports by administrator

182. Court may direct

administrator to lodge report

Sub-division H – Watershed

Meeting

183. What is watershed meeting

184. Administrator must convene

watershed meeting

185. Notice of watershed meeting

186. When watershed meeting

must be held

187. What creditors may decide at

watershed meeting

Sub-division I – End of

Administration

188. When administration ends

189. Normal way for

administration to end

190. Other ways in which

administration may end

191. Notice of end of

administration

Sub-division J – Creditors’

Resolution Approving

Compromise

192. Effect of creditors’

resolution approving

compromise


193. Contents of compromise

document

194. Application of Division 2 to

compromise proposed by

administrator

195. Notice of approval of

compromise

Sub-division K – Creditors’

Resolution Approving

Appointment of Liquidator

196. Creditors’ resolution

approving appointment of

liquidator

197. Appointment of person other

than administrator to be

liquidator

198. Notice of appointment of

liquidator

Sub-division L – Protection of

Persons During Administration

199. Protection of persons dealing

with administrator, etc

200. Validity of things done

during administration

201. General powers to make

orders

202. Court orders protecting

creditors or shareholders

203. Court orders to protect

creditors during

administration

Division 2 –

Compromise with Creditors

204. Compromise proposal

205. Notice of proposed

compromise

206. Effect of compromise

207. Variation of compromise

208. Powers of Court

209. Effect of compromise in

liquidation of company

210. Costs of compromise

Division 3 – Liquidations –

Sub-division A – Purpose

211. Purpose

Sub-division B – Beginning of

Liquidation

212. When liquidation begins

Sub-division C – Restriction on

Appointment of Liquidator

213. Restrictions on appointment

of liquidator

214. Restrictions on appointment

of Official Assignee

Sub-division D – How Liquidator

may be Appointed

215. Board may appoint

liquidator

216. Shareholders may appoint

liquidator

217. Creditors may appoint

liquidator

218. Court may appoint liquidator

219. Interim liquidator

220. Meaning of unable to pay its

debts

221. Evidence and other matters

222. Statutory demand

223. Court may set aside statutory

demand

224. Additional powers of Court

on application to set aside

statutory demand

Sub-division E – Notices

225. Notices given by liquidator

226. Documents to state company

in liquidation


Sub-division F – Obligations of

Liquidators

227. Directors, etc., to identify

and deliver company

property

228. Obligations of suppliers of

essential services

Sub-division G – Liquidators’

Rights To Company’s Documents

229. Liquidator may require

director, etc., to deliver

documents


director, etc., to provide

information

231. Reasonable expenses may be

paid

232. Examination by liquidator

233. Court may order person to

comply with section 229

234. Self-incrimination no excuse

235. Restriction on enforcement

of lien over company’s

documents

236. Delivery of document held

by secured creditor

237. Documents held by receiver

Sub-division H – Meetings

238. Notice of first creditors’

meeting

239. Timing of first creditors’

meeting

240. Purpose of first creditors’

meeting

241. Replacement liquidator

242. Effect of directors’ resolving

company able to pay its

debts

243. Other creditors’ meetings

244. Liquidator may dispense

with meetings of creditors

245. Meetings of creditors or

shareholders

246. Views of creditors and

shareholders at meetings to

be considered

Sub-division I – Reports

247. First report

248. Six-monthly report

249. Exemption from reporting

requirements

Sub-division J – Creditors’

Claims

250. Preferential claims

251. Claims of other creditors and

distribution of surplus assets

Sub-division K – End of

Liquidation

252. Completion of liquidation

253. Final report and accounts

254. Liquidation of surplus

account

255. Termination of liquidation

by Court

256. Effect of Court order under

section 255

257. Notice of termination of

liquidation

258. Effect of compromise on

termination of liquidation

PART 10

REMOVAL OF COMPANIES

FROM REGISTER


259. Removal from register

260. Grounds for removal from

register

261. Request for company to be

removed from register

262. Requirements to be met

before company must be



Division 2 – Notices

263. Notice of intention to

remove company that has

ceased to carry on business

264. Contents of notice

265. Notice of intention to

remove in other cases

Division 3 – Objection

266. Objection to removal from

Samoa register

267. Duties of Registrar if

objection received

268. Powers of Court

Division 4 – Effect of Removal

from Register

269. Property of company


270. Disclaimer of property by

the State

271. Effect of disclaimer

272. Liability of directors,

shareholders, and others to

continue

273. Liquidation of company

removed from Samoa

register

Division 5 – Restoration of

Removed Company to Samoa

Register

274. Registrar may restore

company to Samoa register

275. Requirements to be met

before restoring company to

Samoa register

276. Registrar not restore

company to Samoa register

if objection received

277. Court directions

278. Court may restore company

to Samoa register

279. Restoration to register

280. Vesting of property in

company on restoration to

register

PART 11

OVERSEAS COMPANIES

281. Meaning of carrying on

business

282. Name must comply with

section 10

283. Overseas companies to

register under this Act

284. Validity of transactions not

affected

285. Application for registration

286. Registration of overseas

company

287. Use of name by overseas

company

288. Further information to be

provided by overseas

company

289. Annual return of overseas

company

290. Overseas company ceasing

to carry on business in

Samoa

291. Attorneys of overseas

companies

292. Liquidation of assets in

Samoa

PART 12

TRANSFER OF

REGISTRATION

293. Overseas companies may be

registered as companies

under this Act

294. Application for registration

295. Overseas companies must be

authorised to register

296. Overseas companies that

cannot be registered

297. Registration

298. Effect of registration

299. Companies may transfer

incorporation


300. Application to transfer

incorporation

301. Approval of shareholders

302. Company to give public

notice

303. Companies that cannot

transfer incorporation

304. Removal from register

305. Effect of removal from

register

PART 13

REGISTRAR OF

COMPANIES

Division 1 –

Registrar

Subdivision A – Office

306. Registrar

307. Deputy Registrars

308. Transitional

Subdivision B – Notice by

Registrar

309. Notices: general

310. Notices to individuals

311. Admissibility of notices

given by Registrar

Subdivision C – Powers

312. Registrar may require

information and copies of

documents

313. Registrar may amend

registers

314. Registrar’s powers of

inspection

315. Registrar not to be

obstructed

316. Requirement to consult in

relation to financial

institutions

317. Certain acts not affected by

Registrar’s power of

inspection

318. Disclosure of information

and reports

319. Information and report to be

given to Registrar

320. Restrictions on disclosing

information

321. Inspector’s report admissible

in liquidation proceedings

Subdivision D – Appeals

322. Appeals

323. Exercise of inspection power

not affected by appeal

324. Destruction and

admissibility of Registrar’s

documents

Division 2 –

Registers Kept by Registrar

Sub-division A - Registers

325. Registers

Subdivision B – Inspection of

Registers

326. Inspection of registers

327. Certified copies

328. Evidence

Subdivision C – Registration

329. Registration of documents

330. Rejection of documents

331. When document registered

332. No presumption of validity

or invalidity

PART 14

REREGISTRATION OF 1955

ACT COMPANIES

333. Period for re-registration

334. Rules of re-registered

company

335. Documents to be filed

336. Effect of re-registration


337. Liability of re-registered

company for outstanding

amounts under Companies

Act 1955

338. Failure to re-register

PART 15

MISCELLANEOUS

Division 1 –

Offences

339. Proceedings for offences

340. False statements on

documents

341. Fraudulent use or destruction

of company property

342. Falsification of records

343. Carrying on business

fraudulently

Division 2 – Privileged

Communications and Service of

Documents

344. Privileged communications

345. Service of documents on

companies in legal

proceedings

346. Service of other documents

on companies


overseas companies in legal

proceedings

348. Service of other documents

on overseas companies


shareholders and creditors

350. Additional provisions

relating to service

Division 3 –

Regulation-making Power

351. Regulations

Division 4 –

Repeals And Transitional

Provisions

352. Repeals and revocations

353. General transitional

provisions and savings

Schedules


COMPANIES ACT 2001

2001, No. 6

AN ACT to provide for the formation and governance of

Companies in Samoa.

[Assent date: 20June 2001]

[Commencement date: 1 July 2008]

[Commencement date for s351: 21 December 2006]

BE IT ENACTED by the Legislative Assembly of Samoa in

Parliament assembled as follows:

PART 1

PRELIMINARY

1. Short title – This Act is the Companies Act 2001.

2. Commencement – (1) This Act (except section 351)

comes into force on a date nominated by the Minister.

(2) Section 351 comes into force on the commencement of

the Companies Amendment Act 2006.

(3) Notice of commencement of this Act is to be published

in Samoan and English in the Savali and one other newspaper

circulating in Samoa.

2A. Interpretation – (see Schedule 1).

3. Overview – In this Act:

(a) this Part deals with preliminary matters, such as

how public notice is given for the purposes of

this Act (Schedule 1 contains definitions and

other interpretation provisions);

(b) Part 2 deals with incorporating new companies and

provisions concerning changes to company

names, company rules, and changes to the

registered office and postal address of companies

(Schedules 2 to 4 contain model rules);

(c) Part 3 deals with shares;


(d) Part 4 deals with shareholders (Schedule 5 sets out

the procedure for the minority buy-out

procedure);

(e) Part 5 deals with the powers, duties, and liabilities

of directors;

(f) Part 6 deals with enforcement;

(g) Part 7 deals with company administration (Division

1 sets out dealings with third parties – how to

bind the company, Division 3 relates to company

records, Division 4 sets out the documents that

must be sent to the Registrar (for example, the

annual return) and the shareholders (for example,

the annual report), Division 5 sets out

requirements concerning accounting records,

financial statements, and auditors and see also

the Securities Act 2006, which deals with

companies that offer securities to the public);

(h) Part 8 deals with amalgamations (further provisions

are set out in Schedule 6);

(i) Part 9 contains various procedures for insolvent

companies (section 155 (which provides that

unregistered charges are void as against an

administrator, liquidator, or a creditor of a

company) is a key provision, which is carried

over from the Companies Act 1955, Schedule 7

sets out the procedure and other matters for

registering company charges under this Act,

Division 1 deals with administrations, Schedules

8 to 12 supplement Division 1, Division 2 deals

with compromises with creditors and Schedule

12 supplements that Division, Division 3 deals

with liquidations and Schedules 12 to 18

supplement that Division and see also the

Receiverships Act 2006 for companies that are in

receivership);

(j) Part 10 relates to the removal of companies from

the Samoa register;

(k) Part 11 deals with overseas companies and

Schedule 19 (which relates to the liquidation of

the assets of overseas companies) supplements

that Part;


(l) Part 12 relates to the transfer of registration of

overseas companies;

(m) Part 13 deals with the Registrar of Companies, the

registers under this Act, and registration

requirements;

(n) Part 14 sets out the requirements for reregistering

existing companies under this Act before the end

of the transition period (a company that is not

reregistered before the end of the transition

period must not carry on business until it is

reregistered);

(o) Part 15 sets out some miscellaneous provisions,

including some more offence provisions,

regulation-making powers, repeals, and

transitional and savings provisions.

4. Act binds the Government – This Act binds the

Government.

5. Public notice – If, under this Act, public notice must be

given, that notice must be given by publishing it in at least 1

issue of the Savali; and:

(a) in the case of a matter affecting a company, at least 2

issues of any newspaper circulating in the area in

which is situated—

(i) the company’s place of business; or

(ii) if the company has more than 1 place of

business, the company’s principal place

of business; or

(iii) if the company has no place of business, the

company’s registered office; or

(b) in the case of a matter affecting an overseas

company, at least 2 issues of any newspaper

circulating in the area in which is situated—

(i) the place of business in Samoa of the

overseas company; or

(ii) if the overseas company has more than 1

place of business in Samoa, the principal

place of business in Samoa of the

overseas company.


PART 2

INCORPORATING NEW COMPANIES

Division 1 – Incorporation

6. Application for incorporation – (1) An application for

incorporation of a company must be made to the Registrar in the

prescribed form.

(2) An application for incorporation of a company must

specify:

(a) the name of the company, which must comply with

section 10; and

(b) whether the company is a private company or a

public company; and

(c) whether the rules of the company differ from the

model rules set out in Schedule 2 (in the case of

a private company) or Schedule 4 (in the case of

a public company); and

(d) the full name and residential address and postal

address of any director of the proposed company;

and

(e) the full name of any shareholder of the proposed

company, and the number of shares to be issued

to any shareholder; and

(f) the registered office of the proposed company; and

(g) the postal address of the company, which may be

the postal address of the registered office or any

other postal address.

(3) An application for incorporation must be accompanied

by:

(a) a consent by each person named as a director to act

as a director of the company, in the prescribed

form; and

(b) a copy of the rules of the company, if they differ

from the model rules; and

(c) the prescribed fee.

7. Certificate of incorporation – As soon as the Registrar

receives an application for incorporation that complies with

section 6, the Registrar must:

(a) enter the company on the Samoa register; and


(b) issue a certificate of incorporation in respect of the

company.

8. Effect of incorporation – (1) A certificate of

incorporation of a company is conclusive evidence that:

(a) all the requirements of this Act as to incorporation

have been complied with; and

(b) on and from the date of incorporation stated in the

certificate, the company is incorporated under

this Act.

(2) A company incorporated under this Act is a legal entity

in its own right separate from its shareholders, and continues in

existence until it is removed from the Samoa register.

9. Registration as private company or public company

– (1) A company may be registered as a private company if:

(a) its rules prohibit it from offering its securities to the

public; and

(b) its rules restrict the number of shareholders in the

company to not more than 100; and

(c) it has not more than 100 shareholders.

(2) A company that is not registered as a private company is

a public company.

(3) A public company may apply to the Registrar to be

registered as a private company if:

(a) the company meets the requirements in subsection

(1); and

(b) the application has been approved by share-holders

by special resolution.

(4) If a public company applies to the Registrar under

subsection (3), the Registrar must:

(a) amend the registration of the company accordingly;

and

(b) issue a new certificate of incorporation for the

company in the prescribed form.

(5) A private company may apply to the Registrar to be

registered as a public company, with the approval of share-

holders by special resolution.

(6) A private company must apply to be registered as a

public company if it ceases to meet the requirements in

subsection (1).


(7) The Registrar must register the company as a public

company, and issue a new certificate of incorporation for the

company in the prescribed form if:

(a) an application is made to the Registrar in

accordance with subsection (5) or (6); or

(b) it comes to the Registrar’s attention that a private

company has ceased to satisfy the requirements

of subsection (1).

Division 2 – Names

10. Name of company – (1) The name of a company must

end with the word “Limited”.

(2) The Registrar must not register a company with a name:

(a) that is identical or almost identical to the name of

another company; or

(b) that the use of which would contravene any

enactment in relation to the use of names; or

(c) that contravenes regulations made under this Act in

relation to company names; or

(d) that the Registrar considers to be offensive.

(3) If an application for incorporation of a company

specifies a name that does not meet the requirements of this

section, the Registrar must incorporate the company with a

name in the form:

“Company number x Limited”,

where “x” is a unique number assigned to the company by

the Registrar for this purpose.

11. Change of name – (1) An application to change the

name of a company must be:

(a) in the prescribed form; and

(b) signed by a director of the company; and

(c) accompanied by the prescribed fee.

(2) An application to change the name of a company is not

an amendment of the rules of the company for the purposes of

this Act.

(3) As soon as the Registrar receives a properly completed

application under this section that complies with subsection (1)

and with the requirements in section 10, the Registrar must:


(a) enter the new name of the company on the Samoa

register; and

(b) issue a certificate of incorporation for the company

recording the change of name of the company.

(4) A change of name of a company:

(a) takes effect from the date specified in the certificate

issued under subsection (3); and

(b) does not affect rights or obligations of the company,

or legal proceedings by or against the company.

(5) Legal proceedings that might have been continued or

commenced against the company under its former name may be

continued or commenced against it under its new name.

12. Direction to change name – (1) If the Registrar

believes on reasonable grounds that a company has been

registered under a name that contravenes section 10 at the time

of registration, the Registrar may serve written notice on the

company to change its name by a date specified in the notice

that is not less than 20 working days after the date on which the

notice is served.

(2) If the company does not change its name within the

period specified in the notice, the Registrar may enter on the

Samoa register a new name for the company in the form

“Company number x Limited”, where “x” is a unique number

assigned to the company by the Registrar for this purpose.

(3) If the Registrar registers a new name under subsection

(2):

(a) the Registrar must issue a certificate of in-

corporation for the company recording the new

name of the company; and

(b) section 11(4) applies in relation to the registration

of the new name as if the name of the company

had been changed under section 11.

13. Use of company name – (1) A company must ensure

that its name is clearly stated in:

(a) any written communication sent by, or on be-half

of, the company; and

(b) any document issued or signed by, or on behalf of,

the company that evidences or creates a legal

obligation of the company.


(2) If:

(a) a document that evidences or creates a legal

obligation of a company is issued or signed by or

on behalf of the company; and

(b) the name of the company is not correctly stated in

the document,–

any person who issued or signed the document is liable to the

same extent as the company if the company fails to discharge

the obligation.

(3) Subsection (2) does not apply if:

(a) the person who issued or signed the document

proves that the person in whose favour the

obligation was incurred was aware at the time

the document was issued or signed that the

obligation was incurred by the company; or

(b) the Court is satisfied that it would not be just and

equitable for the person who issued or signed the

document to be so liable.

(4) For the purposes of subsections (1) to (3) and section

107 (which relates to the manner in which a company may enter

into contracts and other obligations), a company may use a

generally recognised abbreviation of a word or words in its

name if it is not misleading to do so.

(5) If, within the period of 12 months immediately before a

company gives public notice of any matter, the name of the

company was changed, the company must ensure that the notice

states:

(a) that the name of the company was changed in that

period; and

(b) the former name or names of the company.

(6) If a company fails to comply with subsection (1) or (5):

(a) the company commits an offence and is liable on

conviction to a fine not exceeding 10 penalty

units; and

(b) every director of the company commits an offence

and is liable on conviction to a fine not

exceeding 10 penalty units.


Division 3 – Rules of Incorporation

14. Adoption and alteration of rules – (1) A company may

adopt rules of incorporation at the time of its incorporation by:

(a) filing those rules with its application for

incorporation; or

(b) for model rules set out in Schedule 2, 3, or 4,

indicating in its application for incorporation that

it wishes to adopt those model rules as its rules.

(2) Subject to any restrictions in its rules, a company may

by special resolution adopt new rules, or alter its rules.

(3) Within 10 working days of the adoption of new rules by

a company, or the alteration of the rules of a company, as the

case may be, the company must deliver a notice in the

prescribed form to the Registrar for registration.

(4) If a company fails to comply with subsection (3), every

director of the company commits an offence and is liable on

conviction to a fine not exceeding 50 penalty units.

15. Model rules – (1) The model rules set out in Schedule 2

have effect as the rules of a private company except to the

extent that the company has:

(a) adopted the model rules set out in another schedule

as its rules; or

(b) adopted rules that exclude, or modify, or are in-

consistent with, the model rules.

(2) The model rules set out in Schedule 4 have effect as the

rules of a public company except to the extent that the company

has:

(a) adopted the model rules set out in another schedule

as its rules; or

(b) adopted rules that exclude, or modify, or are in-

consistent with, the model rules.

(3) A company may resolve to adopt the model rules in

Schedule 2, 3, or 4 as its rules pursuant to section 14(2).

(4) The Head of State acting on the advice of Cabinet may,

make regulations, on all or any of the following things:

(a) amend the model rules in Schedules 2, 3, and 4;

(b) replace all or any of the model rules in Schedules 2,

3 and 4;


(c) specify the class or classes of companies to which

the amended model rules or replaced model rules

will apply;

(d) specify the date or occasion on which the amended

model rules or replaced model rules take effect

or will apply;

(e) without limiting paragraphs (c) and (d), specify

whether the amended model rules or replaced

model rules apply to all companies to which the

relevant model rules apply, or only to companies

incorporated after the date on which the amended

model rules or replaced model rules take effect.

16. Contents and effect of rules – (1) The rules of a

company may contain:

(a) matters contemplated by this Act for inclusion in

the rules of a company;

(b) any other matters that the company wishes to

include in its rules.

(2) Subject to subsection (3):

(a) the rules of a company have effect and may be

enforced as if they constituted a contract—

(i) between the company and its

shareholders; and

(ii) between the company and each director;

and

(b) the shareholders and directors of a company have

the rights, powers, duties, and obligations set out

in the rules of the company.

(3) The rules of a company are of no effect to the extent that

they are inconsistent with this Act.

Division 4 – Registered Office and Postal Address

17. Registered office and postal address – (1) A company

must always have a registered office and postal address in

Samoa.

(2) Subject to section 18:

(a) the registered office of a company at a particular

time is the place that is described as its registered

office on the Samoa register at that time; and


(b) the postal address of a company at a particular time

is the place that is described as its postal address

on the Samoa register at that time.

(3) The description of the registered office of a company

must describe the location of the registered office in enough

detail to enable the registered office to be readily identified for

the purposes of this Act.

18. Change of registered office and postal address – (1)

Subject to the company’s rules and to subsection (3), the

directors of a company may change the registered office and

postal address of the company at any time.

(2) Notice in the prescribed form of the change must be

given to the Registrar for registration.

(3) The change in the registered office or postal address, as

the case may be, takes effect on the later of:

(a) the date that is 5 working days after the notice is

received by the Registrar; or

(b) any date specified in the notice as the date on which

the change is to be effective.

19. Requirement to change registered office or postal

address – (1) Subject to this section, a company must change

its registered office or postal address if it is required to do so by

the Registrar.

(2) The Registrar may require a company to change its

registered office or postal address, as the case may be, by notice

in writing sent to the company at its postal address.

(3) The notice must:

(a) state that the company is required to change its

registered office or postal address by a date

stated in the notice that is not earlier than 20

working days after the date of the notice; and

(b) state the reasons for requiring the change; and

(c) state that the company has the right to appeal to the

Court under this Act; and

(d) be dated and signed by the Registrar.

(4) A copy of the notice must also be sent to each director of

the company.

(5) The company must change its registered office or postal

address, as the case may be:


(a) by the date stated in the notice; or

(b) if it appeals to the Court and the appeal is

dismissed, within 5 working days after the

decision of the Court.

(6) If a company fails to comply with this section:



units; and




PART 3

SHARES


20. Legal nature of shares – A share in a company is

personal property.

21. No nominal value – (1) A share must not have a

nominal or par value.

(2) Nothing in subsection (1) prevents the issue by a

company of a redeemable share.

22. Minimum number of shares – A company must have

at least 1 issued share.

23. Rights and powers attached to shares – (1) Subject to

the rules of the company and to the terms on which it is issued,

a share in a company confers on the holder:

(a) the right to 1 vote on a poll at a meeting of the

company on any resolution, including any

resolution to—

(i) appoint or remove a director or auditor;

(ii) adopt new rules;

(iii) alter the company’s rules;

(iv) approve a major transaction;

(v) approve an amalgamation of the company;


(vi) approve re-registration of a public

company as a private company, or of a

private company as a public company;

(vii) put the company into liquidation:

(viii) approve the transfer of registration of the

company to another country;

(b) the right to an equal share in dividends paid by the

company;

(c) the right to an equal share in the distribution of the

surplus assets of the company in a liquidation.

(2) Subject to the rules of the company, different classes of

shares may be issued in a company.

(3) Without limiting subsection (2), shares in a company

may:

(a) be redeemable; or

(b) confer preferential rights to distributions of capital

or income; or

(c) confer special, limited, or conditional voting rights;

or

(d) not confer voting rights.

24. Shares must not impose liabilities on holder – (1) A

company must not issue a share that is partly paid, or that

otherwise imposes any liability to make a payment to the

company on its holder.

(2) Nothing in subsection (1):

(a) prevents a company from attaching conditions,

limits or restrictions to the rights and powers

attached to the share; or

(b) prevents a company from issuing a share on credit

terms that provide for a liability to make future

payments to the company on the part of the

person to whom it is first issued.

Division 2 – Issue of Shares

25. Issue of initial shares – A company must:

(a) immediately after the registration of the company,

issue to any person named in the application for

registration as a shareholder the number of

shares specified in the application as being the


number of shares to be issued to that person or

those persons:

(b) in the case of an amalgamated company,

immediately after the amalgamation is effective,

issue to any person entitled to a share or shares

under the amalgamation proposal, the share or

shares to which that person is entitled.

26. Issue of other shares – (1) A company may issue

shares:

(a) in accordance with its rules; or

(b) with the approval of all shareholders under section

51.

(2) A company must deliver to the Registrar for registration,

within 10 working days of the issue of any shares, a notice in

the prescribed form of the issue of the shares by the company.

(3) If the rights attached to the shares are not set out in full

in the rules, the notice must be accompanied by a document

setting out the terms of issue of the shares.




27. Time of issue of shares – A share is issued when the

name of the holder is entered on the share register.

Division 3 – Distributions: General

28. Distributions prohibited unless solvency test satisfied

– A company must not make a distribution to shareholders

unless there are reasonable grounds for believing that, after that

distribution is made, the company will satisfy the solvency test.

29. Recovery of improper distributions – (1) A

distribution made to a shareholder in breach of section 28, 30,

or 31 may be recovered by the company from the shareholder

unless:

(a) the shareholder received the distribution in good

faith and without knowledge of the company’s

breach of section 28, 30, or 31, as the case may

be; and


(b) the shareholder has altered the shareholder’s

position in reliance on the validity of the

distribution; and

(c) it would be unfair to require repayment in full or at

all.

(2) If a distribution has been made in breach of section 28,

any person who authorised the making of the distribution at a

time when that person knew, or ought to have known, that the

distribution did not comply with section 28 is liable to repay to

the company so much of that distribution as is not reasonably

recoverable from the recipients under subsection (1).

(3) If, in an action brought under this section, the Court is

satisfied that the company could, by making a distribution of a

lesser amount, have satisfied the requirements of section 28, the

Court may permit a shareholder to retain, or excuse a person

who authorised the distribution from liability in respect of, an

amount equal to the value of any distribution that could

properly have been made.

Division 4 – Dividends

30. Dividends – (1) Subject to section 28 and to subsection

(2), a company may pay a dividend to share-holders if, and only

if, that dividend is authorised:

(a) by all shareholders under section 51; or

(b) if the company’s rules so provide, by the directors.

(2) A dividend authorised by the directors must comply with

any conditions or restrictions set out in the rules.

(3) Subject to its rules and to the terms of issue of any share,

a company must not pay a dividend:

(a) in respect of some, but not all, shares; or

(b) that is of a greater value per share in respect of

some shares than of others.

(4) Subsection (3) does not apply if the payment of that

dividend in that manner is approved by all shareholders under

section 51.

(5) In this section, “dividend” means any distribution other

than:

(a) a distribution by way of repurchase or redemption

of shares; or


(b) a distribution of the surplus assets of the company

in a liquidation.

Division 5 – Acquisition of Own Shares

31. Company may acquire its own shares – (1) A

company may acquire its own shares only:

(a) under subsection (2) or section 55; and

(b) subject to section 28.

(2) A company may acquire its own shares by agreement

with a shareholder:


(b) with the approval of all shareholders under section

51.


within 10 working days of the acquisition of any shares, a

notice in the prescribed form of the acquisition of the shares by

the company.

(4) The notice required under subsection (3) must also be

sent to each shareholder within 20 working days of the

acquisition of the shares if an acquisition of shares by a

company does not result from an offer made to all shareholders

that:

(a) would, if accepted, leave unaffected relative voting

and distribution rights; and

(b) affords a reasonable time for acceptance of the

offer.

(5) If a company fails to comply with subsection (3) or (4),

every director of the company commits an offence and is liable

on conviction to a fine not exceeding 50 penalty units.

32. Cancellation of shares acquired by company – (1) If a

company acquires its own shares, those shares are taken to be

cancelled immediately on acquisition unless the rules of the

company expressly provide otherwise.

(2) If a company acquires its own shares and the rules

provide that those shares are not cancelled on acquisition, the

rights attached to those shares may not be exercised by or

against the company at any time at which it would, apart from

this section, be entitled to:

(a) exercise those rights; or


(b) give directions to the holder of that share as to the

manner in which any of those rights should be

exercised.

(3) For the purposes of this section, a company acquires a

share at the time at which it would, apart from this section,

become entitled to:

(a) exercise the rights attached to that share; or

(b) give directions to the holder of that share as to the

manner in which any rights attached to that share

should be exercised.

33. Enforcement of contract to repurchase shares – (1) A

contract with a company providing for the acquisition by the

company of its shares is specifically enforceable against the

company except to the extent that performance would breach

section 28.

(2) The company has the burden of proving that

performance of the contract would breach section 28.

(3) Until the company has fully performed a contract

referred to in subsection (1), the other party to the contract

retains the status of a claimant entitled to be paid as soon as the

company is lawfully able to do so or, before the removal of the

company from the Samoa register, to be ranked subordinate to

the rights of creditors but in priority to the other shareholders.

Division 6 – Redeemable Shares

34. Redeemable shares – (1) For the purposes of this Act, a

share is redeemable if the rules or the terms of issue of the share

make provision for the redemption of that share by the

company:

(a) at the option of the company; or

(b) at the option of the holder of the share; or

(c) on a date specified in the rules or the terms of issue

of the share, - for a consideration that is—

(i) specified; or

(ii) to be calculated by reference to a formula;

or

(iii) required to be fixed by a suitably qualified

person who is not associated with or

interested in the company.


(2) To avoid doubt, the auditor of a company is not

associated with or interested in the company for the purposes of

subsection (1)(f).

35. Redemption of redeemable shares – (1) A company

must redeem a redeemable share in accordance with its rules

and the terms of issue of the share, except to the extent that the

company would, by doing so, breach section 28.

(2) The company has the burden of proving that redemption

of a share would breach section 28.

(3) Until the company has fully redeemed a share in

accordance with subsection (1), the former holder of the share

retains the status of a claimant entitled to be paid as soon as the

company is lawfully able to do so or, before the removal of the

company from the Samoa register, to be ranked subordinate to

the rights of creditors but in priority to the other shareholders.

(4) Redeemable shares are taken to be cancelled

immediately on the date on which the rules or their terms of

issue provide for them to be redeemed, unless the rules or terms

of issue provide otherwise.


within 10 working days of the redemption of any shares, a

notice in the prescribed form of the redemption of the shares by

the company.




Division 7 – Assistance by Company in Purchase of its Own

Shares

36. Financial assistance – A company may give financial

assistance to a person for the purpose of, or in connection with,

the purchase of a share issued or to be issued by the company,

whether directly or indirectly, only if:

(a) the company gives the assistance in the normal

course of its business and on usual terms and

conditions; or

(b) the giving of the assistance is authorised by the

directors or by all shareholders under section 51,

and—


(i) there are reasonable grounds for believing

that, after providing the assistance, the

company will satisfy the solvency test; and

(ii) the company complies with any conditions

or restrictions in its rules.

Division 3 – Cross-Holdings

37. Cross-holdings – (1) Subject to this section, a

subsidiary must not hold shares in its holding company.

(2) An issue of shares by a holding company to its

subsidiary is void.

(3) A transfer of shares in a holding company to its

subsidiary is void.

(4) If a company that holds shares in another company

becomes a subsidiary of that other company, the subsidiary:

(a) may, despite subsection (1), continue to hold those

shares; but

(b) may not exercise any voting rights or other rights

attaching to those shares, other than rights to

receive distributions and to receive notices and

other information from the company.

(5) Nothing in this section prevents a subsidiary holding

shares in its holding company in its capacity as a personal

representative or a trustee unless the holding company or

another subsidiary has a beneficial interest under the trust other

than an interest that arises by way of security for the purposes

of a transaction made in the ordinary course of the business of

lending money.

(6) This section applies to a nominee for a subsidiary in the

same way as it applies to the subsidiary.

Division 9 – Transfer of Shares

38. Transfer of shares – (1) Subject to any limitation or

restriction on the transfer of shares in the rules, a share in a

company is transferable.

(2) A share is transferred by entry in the share register in

accordance with section 40.


(3) The personal representative of a deceased shareholder

may transfer a share even though the personal representative is

not a shareholder at the time of transfer.

39. Transfer of shares by operation of law – (1) Subject to

subsection (2), shares in a company may pass by operation of

law despite anything in the rules of the company.

(2) The rules of a company may provide that, if a share

passes by operation of law, the voting rights attached to that

share cease to be exercisable until it is transferred in accordance

with the rules of the company.

Division 10 – Share Register

40. Company to maintain share register – (1) A company

must maintain a share register that records the shares issued by

the company and states:

(a) the names, alphabetically arranged, and the last

known address of each person who is, or has

within the last 7 years been, a shareholder; and

(b) the number of shares of each class held by each

shareholder within the last 7 years; and

(c) the date of any issue of shares to, repurchase or

redemption of shares from, or transfer of shares

by or to, each shareholder within the last 7 years,

and in relation to the transfer, the name of the

person to or from whom the shares were

transferred.

(2) The share register must be kept:

(a) in a form permitted under section 118; and

(b) at the registered office of the company, or any other

place or places permitted under section 119.

(3) The share register of the company may be maintained by

an agent on behalf of the company.

(4) If a company fails to comply with the requirements of

this section:



units; and





41. Share register as evidence of legal title – (1) Subject to

section 42, the entry of the name of a person in the share

register as holder of a share is evidence that legal title to the

share vests in that person.

(2) A company must treat the registered holder of a share as

the only person entitled to:

(a) exercise the right to vote attaching to the share; and

(b) receive notices; and

(c) receive a distribution in respect of the share; and

(d) exercise the other rights and powers attaching to the

share.

42. Power of court to rectify share register – (1) If the

name of a person is wrongly entered in, or omitted from, the

share register of a company, the person aggrieved, or a

shareholder, may apply to the Court for rectification of the share

register, or compensation for loss sustained, or both.

(2) The Court may, on an application under this section,

order:

(a) rectification of the register;

(b) payment of compensation by the company or a

director of the company for any loss sustained;

(c) rectification and payment of compensation.

(3) The Court may, on an application under this section,

decide:

(a) a question relating to the entitlement of a person

who is a party to the application to have his or

her name entered in, or omitted from, the

register; and

(b) a question necessary or expedient to be decided for

rectification of the register.

43. Trusts not to be entered on register – No notice of a

trust, whether express, implied, or constructive, may be entered

on the share register.


44. Registration of personal representative or assignee of

bankrupt – (1) Despite section 43, but subject to section 39, a

personal representative of a deceased person whose name is

registered in a share register of a company as the holder of a

share in that company is entitled to be registered as the holder

of that share as personal representative.

(2) Despite section 43, but subject to section 39(2), the

assignee of the property of a bankrupt registered in a share

register of a company as the holder of a share in that company is

entitled to be registered as the holder of that share as the

assignee of the property of the bankrupt.

(3) The registration of a trustee, executor, or administrator

or of an assignee under this section does not constitute notice of

a trust.

(4) In this section, “assignee” means the assignee in whom

the property of a bankrupt is vested pursuant to the Bankruptcy

Act 1908.

Division 11 – Share Certificates

45. Share certificates – (1) A shareholder may apply to the

company for a share certificate relating to some or all of the

shareholder’s shares in the company.

(2) On receipt of an application for a share certificate under

subsection (1), the company must, within 20 working days after

receiving the application:

(a) if the application relates to some but not all of the

shares, separate the shares shown in the register

as owned by the applicant into separate parcels;

1 parcel being the shares to which the share

certificate relates, and the other parcel being any

remaining shares; and

(b) in all cases send to the shareholder a certificate

stating—

(i) the name of the company; and

(ii) the class of shares held by the share-holder;

and

(iii) the number of shares held by the

shareholder to which the certificate

relates.


(3) If a share certificate has been issued, a transfer of the

shares to which it relates must not be registered by the company

unless the form of transfer required by that section is

accompanied by:

(a) the share certificate relating to the share; or

(b) evidence as to its loss or destruction and, if

required, an indemnity in a form required by the

board.

(4) If shares to which a share certificate relates are to be

transferred, and the share certificate is sent to the company to

enable the registration of the transfer, the share certificate must

be cancelled and no further share certificate issued except at the

request of the transferee.

(5) If a company fails to comply with subsection (1):



units; and




PART 4

SHAREHOLDERS


46. A company must have at least 1 shareholder – A

company must at all times have at least 1 shareholder.

47. Liability of shareholders – (1) A shareholder is not

liable for an obligation of the company by reason only of being

a shareholder.

(2) The liability of a shareholder to the company is limited

to:

(a) any liability to repay a distribution that is

recoverable under section 29;

(b) any liability under section 73.

(3) Nothing in this section affects the liability of a

shareholder to a company under a contract, including a contract

for the issue of shares, or liability incurred in any other

capacity, including as a director of the company, or liability for


any tort, or breach of a fiduciary duty, or other actionable wrong

committed by the shareholder.

48. Decisions that must be made by shareholders – The

following powers must be exercised by the shareholders of a

company by special resolution, and may not be delegated under

the rules or otherwise:

(a) the power to approve registration of a public

company as a private company under section

9(3), or of a private company as a public

company under section 9(5);

(b) the power to adopt new rules, or to amend the

company’s rules, under section 14(2);

(c) the power to approve an amalgamation of the

company under section 143 and Schedule 6;

(d) the power to approve a major transaction under

section 50(1)(b)(i);

(e) the power to put the company into liquidation;

(f) the power to approve an extension of time for the

completion of a private company’s financial

statements under section 130(3);

(g) the power to approve the transfer of registration of

the company to another country under section

301.

49. Decisions that may be made by shareholders – (1)

Unless the rules provide otherwise, the following powers are

exercised by shareholders:

(a) the power to appoint or remove a director;

(b) the power to appoint an auditor.

(2) The rules may provide for other matters to be decided by

shareholders, or approved by shareholders.

(3) Unless the rules provide otherwise, the powers referred

to in subsection (1), and any other powers conferred on

shareholders under subsection (2), may be exercised:

(a) by ordinary resolution; or

(b) in accordance with section 51.

50. Shareholder approval of major transactions – (1) A

company must not enter into a major transaction unless:


(a) the rules expressly authorise it to enter into that

transaction, or transactions of that class; or

(b) entry into the transaction is approved by share-

holders—

(i) by special resolution; or

(ii) in accordance with section 51; or

(c) the transaction is conditional on approval by

shareholders in accordance with paragraph (b).

(2) In this section:

“assets” includes property of any kind, whether tangible or

intangible;

“major transaction”, in relation to a company, means:

(a) the acquisition of, or an agreement to acquire,

whether contingent or not, assets the value of

which is more than half the value of the

company’s assets before the acquisition; or

(b) the disposition of, or an agreement to dispose of,

whether contingent or not, assets of the company

the value of which is more than half the value of

the company’s assets before the disposition; or

(c) a transaction that has, or is likely to have, the effect

of the company acquiring rights or interests or

incurring obligations or liabilities the value of

which is more than half the value of the

company’s assets before the transaction.

(3) Nothing in paragraph (c) of the definition of “major

transaction” in subsection (2) applies by reason only of the

company giving, or entering into an agreement to give, a charge

secured over assets of the company the value of which is more

than half the value of the company’s assets for the purpose of

securing the repayment of money or the performance of an

obligation.

(4) Nothing in this section applies to a major transaction

entered into by a receiver appointed under a document creating

a charge over property of a company.

51. Unanimous shareholder approval – (1) If all the

shareholders of a company consent to or concur in any action

taken by the company or a director, the taking of that action is

taken to be validly authorised by the company despite:

(a) anything to the contrary in its rules; or


(b) the absence of express authority to take that action

in its rules.

(2) The matters that may be authorised under subsection (1)

include, but are not limited to, the following:

(a) the issue of shares;

(b) the making of a distribution;

(c) the repurchase of shares;

(d) giving financial assistance for the purpose of, or in

connection with, the purchase of shares in the

company;

(e) the payment of remuneration to a director, or the

making of a loan to a director, or the conferral of

any other benefit on a director;

(f) the making of a contract between the company and

a director, or of any other contract in which a

director has an interest;

(g) entry into a major transaction;

(h) the ratification after the event of any action that

could have been authorised under this section.

(3) A company must not authorise a distribution under this

section unless there are reasonable grounds for believing that,

after that distribution is made, the company will satisfy the

solvency test.

(4) Section 29 applies to a distribution made in breach of

subsection (3) as if:

(a) the distribution had been made in breach of section

28; and

(b) the distribution was authorised by all shareholders.

52. Shareholder written resolutions – (1) Subject to

subsection (3), a resolution in writing signed by shareholders

who together hold not less than 75% of the votes entitled to be

cast on that resolution at a meeting of shareholders is as valid as

if it had been passed at a meeting of those shareholders.

(2) A resolution in writing is made in accordance with this

Act or the rules of the company, as the case may be, if the

resolution:

(a) relates to a matter that is required by this Act or by

the rules to be decided at a meeting of the

shareholders of a company; and


(b) is signed by the shareholders referred to in sub-

section (1).

(3) If, in respect of any matter, the rules of a company:

(a) require approval by a higher majority than 75% of

those shareholders entitled to vote and voting,

the reference in subsection (1) to 75% is taken to

be a reference to that higher majority;

(b) specify additional requirements for approval of

such matters, those requirements must also be

satisfied in order for the resolution to be valid.

(4) Within 5 working days of a resolution being passed

under this section, the company must send a copy of the

resolution to any shareholder who did not sign the resolution.

(5) A resolution may be signed under subsection (1) or (2)

without any prior notice being given to shareholders.




units; and




53. Shareholder meetings – (1) The rules of a company

must include provisions:

(a) for holding meetings of shareholders of the

company; and

(b) that govern proceedings at meetings of shareholders

of the company.

(2) Meetings of the shareholders of a company must be held

in accordance with the rules of the company.

(3) A special meeting of shareholders entitled to vote on an

issue:

(a) may be called at any time by a director; and

(b) must be called by the directors on the written

request of shareholders holding shares carrying

together not less than 5% of the votes that may

be cast on the issue.

Division 2 – Alteration of Shareholder Rights


54. Alteration of shareholder rights – (1) A company

must not take action that affects the rights attached to shares

unless that action has been approved by:

(a) a special resolution of each interest group; or

(b) all shareholders under section 51.

(2) For the purposes of subsection (1), the rights attached to

a share include:

(a) the rights, privileges, limitations, and conditions

attached to the share by this Act or the rules,

including voting rights and rights to

distributions;

(b) the right to have any provisions of the rules in

relation to the issue of further shares observed by

the company;

(c) the right to have the procedure set out in this

section, and any further procedure required by

the rules for the amendment or alteration of

rights, observed by the company;

(d) the right that a procedure required by the rules for

the amendment or alteration of rights not be

amended or altered.


“class” means a class of shares having attached to them

identical rights, privileges, limitations, and

conditions;

“interest group”, in relation to any action or proposal

affecting rights attached to shares, means a group of

shareholders:

(a) whose affected rights are identical; and

(b) whose rights are affected by the action or

proposal in the same way; and

(c) subject to subsection (4)(b), who comprise the

holders of 1 or more classes of shares in the

company.

(4) For the purposes of this section and the definition of

“interest group”:

(a) one or more interest groups may exist in relation to

any action or proposal; and

(b) holders of shares in the same class may fall into 2

or more interest groups if—


(i) action is taken in relation to some holders of

shares in a class and not others; or

(ii) a proposal expressly distinguishes between

some holders of shares in a class and

other holders of shares of that class.

55. Repurchase of dissenter’s shares – (1) A shareholder

is entitled to require the company to purchase shares in

accordance with the procedure set out in Schedule 5 if:

(a) the shareholder is entitled to vote on the exercise of

1 or more of the powers set out in—

(i) section 48(b) and the proposed alteration

imposes or removes a restriction on the

activities of the company; or

(ii) section 48(c) or (d); and

(b) the shareholders resolve to exercise the power; and

(c) the shareholder cast all the votes attached to shares

registered in the shareholder’s name and having

the same beneficial owner against the exercise of

the power.

(2) A shareholder is entitled to require the company to

purchase shares in accordance with the procedure set out in

Schedule 5 if:

(a) an interest group of which the shareholder was a

member has, under section 54, approved, by

special resolution, the taking of action that

affects the rights attached to those shares; and

(b) the company becomes entitled to take the action;

and

(c) the shareholder cast all the votes attached to the

shares registered in that shareholder’s name and

having the same beneficial owner against

approving the action.

(3) If a resolution of shareholders or of an interest group is

made in writing in accordance with section 52, subsections (1)

and (2) apply as if references to a shareholder who cast all the

votes attached to shares registered in the shareholder’s name

and having the same beneficial owner against the matter in

question were references to a shareholder who did not sigh the

written resolution in respect of those shares.


Division 3 – Disclosure to Shareholders

56. Annual report to shareholders – (1) Subject to

subsection (2), the directors of any company must, within 20

working days after the date on which the company is required to

complete its financial statements under section 130:

(a) prepare an annual report on the affairs of the

company during the accounting period ending on

that date; and

(b) send a copy of that report to each shareholder.

(2) The rules of a private company may provide that the

directors are only required to prepare an annual report in respect

of an accounting period if a shareholder has given written notice

to the company before the end of that accounting period

requiring the annual report to be prepared.

(3) The annual report for a company must:

(a) be in writing and be dated; and

(b) include financial statements for the accounting

period that comply with section 130; and

(c) if an auditor’s report is required for the financial

statements included in the report, include that

auditor’s report; and

(d) state the names of the persons holding office as

directors of the company as at the end of the

accounting period and the names of any persons

who ceased to hold office as directors of the

company during the accounting period; and

(e) contain any other information that may be required

by—

(i) regulations made under this Act; and

(ii) the rules; and

(f) be signed on behalf of the directors by 2 directors

of the company or, if the company has only 1

director, by that director.

(4) If the directors of a company fail to comply with

subsection (1), every director of the company commits an

offence and is liable on conviction to a fine not exceeding 50

penalty units.


57. Inspection of company records by shareholders – A

shareholder is entitled to inspect company records in

accordance with section 121.

58. Request for information held by company – (1) A

shareholder may, at any time, make a written request to a

company for information held by the company.

(2) The request must specify the information sought in

enough detail to enable it to be identified.

59. Company must provide requested information –

Within 10 working days of receiving a request under section 58,

the company must:

(a) provide the information; or

(b) agree to provide the information within a specified

period; or

(c) agree to provide the information within a specified

period if the shareholder pays a reasonable

charge to the company (which must be specified

and explained) to meet the cost of providing the

information; or

(d) refuse to provide the information, specifying the

reasons for the refusal.

60. Reasons for refusing information – Without limiting

the reasons for which a company may refuse to provide

information under section 59, a company may refuse to provide

information if:

(a) the disclosure of the information would be likely to

prejudice the commercial position of the

company; or

(b) the disclosure of the information would be likely to

prejudice the commercial position of any other

person, whether or not that person supplied the

information to the company; or

(c) the request for the information is frivolous or

vexatious.

61. Shareholder may withdraw request – If the company

requires the shareholder to pay a charge for the information, the

shareholder may withdraw the request, and is taken to have


done so unless, within 10 working days of receiving notification

of the charge, the shareholder informs the company that the

shareholder:

(a) will pay the charge; or

(b) considers the charge to be unreasonable.

62. Court may order company to provide requested

information – (1) The Court may, on the application of a

person who has requested information, make an order requiring

the company to provide the information within any time and on

payment of any charge that the Court thinks fit if it is satisfied

that:

(a) the company does not have sufficient reason to

refuse to provide the information; or

(b) the period specified for providing the information is

unreasonable; or

(c) the charge set by the company is unreasonable.

(2) If the Court makes an order under subsection (1), it may

specify the use that may be made of the information and the

persons to whom it may be disclosed.

(3) On an application for an order under this section, the

Court may make any order for the payment of costs that it

thinks fit.

63. Investigation at request of shareholder – (1) On the

application of a shareholder of a company, the Court may

make:

(a) an order authorising a person named in the order at

a time specified in the order, to inspect and to

make copies of, or take extracts from, the records

or other documents of the company, or any of the

records or documents of the company specified

in the order; and

(b) any ancillary order that it thinks fit, including an

order that the accounts of the company be

audited by that person.

(2) The Court may make an order under subsection (1) only

if it is satisfied that:

(a) in making the application, the shareholder is acting

in good faith and that the inspection is proposed

to be made for a proper purpose; and


(b) the person to be appointed is a proper person for the

task.

(3) A person appointed by the Court under subsection (1)

must diligently carry out the inspection and, having done so,

must make a full report to the Court.

(4) On receiving the report of an inspector, the Court may

make any order in relation to the disclosure and use that may be

made of the records and information obtained that it thinks fit.

(5) An order made under subsection (4) may be varied.

(6) The reasonable costs of the inspection must be met by

the company unless the Court orders otherwise.

(7) A person may only disclose or make use of information

or records obtained under this section in accordance with an

order made under subsection (4) or (5).

(8) A person who discloses or makes use of information or

records obtained under this section other than in accordance

with an order made under subsection (4) or (5) commits an


penalty units.

PART 5

DIRECTORS

Division 1 – Powers and Duties

Subdivision A – Powers

64. Management of company – Except to the extent that

this Act or the company’s rules provide otherwise:

(a) the business and affairs of a company must be

managed by, or under the direction or

supervision of, the directors of the company; and

(b) the directors of a company have all the powers

necessary for managing, and for directing and

supervising the management of, the business and

affairs of the company.


Sub-division B – Duties

65. Fundamental duties of directors – A director of a

company must, when exercising powers or performing duties as

a director, act:

(a) in good faith; and

(b) in a manner that the director believes to be in the

interests of the company.

66. Duty of directors to comply with Act – A director of a

company must not act, or agree to the company acting, in a

manner that contravenes this Act.

67. Duty of directors to comply with rules – A director of

a company must not act, or agree to the company acting, in a

manner that contravenes the company’s rules.

68. Interest of director in company transactions – (1) A

director must not exercise any power as a director if the director

is directly or indirectly materially interested in the exercise of

that power unless:

(a) this Act expressly authorises the director to exercise

the relevant power despite that interest; or

(b) the director has reasonable grounds for believing

that the company will satisfy the solvency test

after that power is exercised, and either—

(i) the rules expressly authorise the director to

exercise the relevant power despite that

interest, following disclosure of the

interest in accordance with subsection

(2); or

(ii) the exercise of the power by the director has

been approved by all shareholders under

section 51, following disclosure of the

nature and extent of the director’s interest

to all shareholders who are not otherwise

aware of those matters.

(2) A director who is directly or indirectly materially

interested in the exercise of any power may only be authorised

by the rules to exercise that power if the rules require that,


before the exercise of the power, the director discloses the

nature and extent of that interest in writing:

(a) if there is at least 1 other director who is not

directly or indirectly materially interested in the

transaction or proposed transaction, to the

directors of the company;

(b) if paragraph (a) does not apply, to all shareholders

other than the director.

69. Use and disclosure of company information – A

director of a company who has information in his or her

capacity as a director or employee of the company, being

information that would not otherwise be available to him or her,

must not disclose that information to any person, or make use of

or act on the information, except:

(a) in the interests of the company; or

(b) as required by law; or

(c) if there are reasonable grounds for believing that

the company will satisfy the solvency test after

the director takes that action and that action—

(i) is authorised by the rules; or

(ii) is approved by shareholders under section

51.

70. Standard of care of directors – Subject to the

company’s rules, a director of a company, when exercising

powers or performing duties as a director, must exercise the

care, diligence, and skill that a reasonable person would

exercise in the same circumstances taking into account but

without limitation:

(a) the nature of the company; and

(b) the nature of the decision; and

(c) the position of the director and the nature of the

responsibilities undertaken by him or her.

71. Obligations of directors in connection with

insolvency – (1) A director of a company must call a meeting of

directors within 10 working days to consider whether the

directors should appoint an administrator or liquidator if the

director:


(a) believes that the company is unable to pay its debts

as they fall due in the normal course of business;

or

(b) is aware of matters that would put any reasonable

person on inquiry as to whether the company is

unable to pay its debts as they fall due in the

normal course of business.

(2) At a meeting called under this section the directors must

consider whether to appoint an administrator or liquidator, or to

continue to carry on the business of the company.

(3) A director is liable to any creditor to whom the company

incurred an obligation after the time that the director failed to

comply with subsection (1) if:

(a) at the time of that failure, the company was unable

to pay its debts as they fell due in the normal

course of business; and

(b) the company is later placed in liquidation.

(4) Each director who did not participate in the meeting and

did not vote in favour of appointing an administrator or a

liquidator is liable to any creditor to whom the company

incurred an obligation after the date of the meeting in

accordance with subsection (5) if:

(a) at a meeting called under this section the directors

do not resolve to appoint an administrator or

liquidator; and

(b) at the time of that meeting there were no reasonable

grounds for believing that the company was able

to pay its debts as they fell due; and

(c) the company is later placed in liquidation.

(5) A director who is liable to a creditor under subsections

(3) or (4) in respect of an obligation of the company is liable to

that creditor for the amount of any loss suffered by that creditor

as a consequence of the company’s failure to perform that

obligation, unless the director establishes that the creditor:

(a) knew or ought to have known of the circumstances

that called into question the solvency of the

company; or

(b) otherwise assumed the risk of dealing with the

company in those circumstances.

(6) If more than 1 director is liable to a creditor under this

section, the liability of those directors is joint and several.


72. Effect of unanimous shareholder approval on certain

duties of directors – If a director exercises any power or takes

any other action in his or her capacity as a director with the

consent or concurrence of shareholders under section 51:

(a) the director is taken to be acting in accordance with

the requirements of section 67; and

(b) if, at the time the director so acts, there are

reasonable grounds for believing that the

company is able to meet its debts as they fall

due, the director is taken to be acting under the

requirements of sections 65 and 70.

Division 2 – Liabilities

Subdivision A – General

73. Persons taken to be directors for liability purposes –

(1) A person (principal) in accordance with whose directions or

instructions a director is required or is accustomed to act is

liable under sections 65 to 71 to the same extent as that director,

unless the principal shows that the director was not in fact

acting in accordance with the principal’s directions or

instructions in acting or failing to act in the manner giving rise

to liability on the part of the director.

(2) A person who exercises, or who is entitled to exercise, or

who controls or who is entitled to control the exercise, of

powers that, apart from the rules of the company, would fall to

be exercised by the directors, is liable under sections 65 to 70 in

connection with the exercise of those powers as if that person

were a director.

(3) Without limiting subsection (2), if the rules of a

company confer a power on shareholders that would otherwise

fall to be exercised by directors under this Act, any shareholder

who exercises that power or who takes part in deciding whether

to exercise that power is liable under sections 65 to 70 in

connection with the exercise of that power as if that person were

a director.

(4) A person to whom a power or duty of the directors has

been directly delegated by the directors with that person’s

consent or acquiescence, or who exercises the power or duty


with the consent or acquiescence of the directors, is liable under

sections 65 to 70 in connection with the exercise of those

powers as if that person were a director.

(5) To avoid doubt, if any action is approved by all

shareholders under section 51:

(a) no shareholder is liable under section 67 for that

action;

(b) if there are reasonable grounds for believing that

the company is able to meet its debts as they fall

due, no shareholder is liable under section 65,

68, 69 or 70 for that action.

Subdivision B – Indemnities and Insurance for Directors

74. Certain indemnities prohibited – (1) A company may

not indemnify a director of the company or of any related

company in respect of:

(a) any criminal liability; or

(b) any liability to the company or a related company

for any act or omission in his or her capacity as a

director of the company or of the related

company, as the case may be; or

(c) any liability to any person arising out of a breach by

that person of a duty to the company or related

company, as the case may be, under any of

sections 65 to 71.

(2) An indemnity given in breach of this section is void.


“director” includes:

(a) a person who is liable under any of sections 65 to

71 by virtue of section 73;

(b) a former director;

“indemnify” includes relieve or excuse from liability,

whether before or after the liability arises; and

“indemnity” has a corresponding meaning.

75. Company may indemnify or insure directors –

Subject to section 74, a company may provide an indemnity or

purchase insurance for a director of the company or of a related

company:



(b) with the approval of shareholders under section 51.

Sub-division C – Defences

76. Defences for directors – (1) It is a defence to a director

charged with an offence in relation to a duty imposed on the

directors of a company if the director proves that:

(a) the directors took all reasonable and proper steps to

ensure that the requirements would be complied

with; or

(b) the director took all reasonable and proper steps to

ensure that the directors complied with the

requirements; or

(c) in the circumstances the director could not

reasonably have been expected to take steps to

ensure that the directors complied with the

requirements.

(2) It is a defence to a director charged with an offence in

relation to a duty imposed on the company if the director proves

that:

(a) the company took all reasonable and proper steps to

ensure that the requirements would be complied

with; or

(b) the director took all reasonable steps to ensure that

the company complied with the requirements; or

(c) in the circumstances the director could not

reasonably have been expected to take steps to

ensure that the company complied with the

requirements.

Division 3 – Prohibition and Disqualification of Directors

77. Persons prohibited from managing companies – (1)

A person must not, during the period of 5 years after the

conviction or the judgment, be a director or promoter of, or in

any way, whether directly or indirectly, be concerned or take

part in the management of, a company if the person has been

convicted of an offence:

(a) in connection with the promotion, formation, or

management of a company punishable by

imprisonment for a term exceeding 2 years,


whether or not a sentence of imprisonment was

imposed; or

(b) under any of sections 340 to 343 of this Act or

under Part 14 and 17 of the Crimes Act 2013.

(2) Subsection (1) does not apply if the person first obtains

the leave of the Court, which may be given on any conditions

that the Court thinks fit.

(3) A person who intends to apply for the leave of the Court

under subsection (2) must give to the Registrar not less than 10

working days’ notice of that person’s intention to apply.

(4) The Registrar, and any other persons that the Court

thinks fit, may attend and be heard at the hearing of any

application under this section.

(5) A person who fails to comply with this section or any

order made under this section, commits an offence and is liable

on conviction to imprisonment for a term not exceeding 7 years

or to a fine not exceeding 1000 penalty units, or both.

(6) In this section, “company” includes an overseas

company that carries on business in Samoa.

78. Court may disqualify directors – (1) The Court may

make an order that a person must not, without the leave of the

Court, be a director or promoter of, or in any way, whether

directly or indirectly, be concerned or take part in the

management of, a company for any period, not exceeding 10

years, that may be specified in the order if the person has:

(a) been convicted of any offence in connection with

the promotion, formation, or management of a

company punishable by imprisonment for a term

exceeding 2 years, whether or not a sentence of

imprisonment was imposed; or

(b) been convicted of an offence under any of sections

340 to 343 of this Act or under Parts XIV and

XV (except sections 182, 183 or 184) of the

Crimes Act 2013; or

(c) committed an offence for which the person is liable

(whether convicted or not) under this Part; or

(d) while a director of a company and whether

convicted or not—

(i) persistently failed to comply with this Act or

the Companies Act 2001, or, if the


company has failed to so comply,

persistently failed to take all reasonable

steps to obtain compliance; or

(ii) been guilty of fraud in relation to the

company or of a breach of duty to the

company or a shareholder; or

(iii) acted in a reckless or incompetent manner in

the performance of his or her duties as

director; or

(e) been convicted, in any other country, of an offence

that corresponds to any of the offences referred

to in paragraphs (a) to (c); or

(f) been prohibited under the law of any other country

from acting as a director of a company, or being

concerned or taking part in the management of a

company; or

(g) become of unsound mind.

(2) An order may be made under this section even though

the person concerned may be criminally liable in respect of the

matters on the ground of which the order is to be made.

(3) The Registrar of the Court must, as soon as practicable

after the making of an order under this section, give notice to

the Registrar that the order has been made and the Registrar

must give public notice of the name of the person against whom

the order is made.

(4) A person who fails to comply with an order under this

section commits an offence and is liable on conviction to a fine

not exceeding 1000 penalty units or to imprisonment for a term

not exceeding 7 years, or both.

(5) In this section and sections 79 and 80, “company”

includes an overseas company.

79. Persons entitled to apply for order under section 78 –

(1) An application for an order under section 78 may be made

by the Registrar, the Official Assignee, or by the liquidator of

the company, or by a person who is, or has been, a shareholder

or creditor of the company.

(2) The Registrar, Official Assignee, or liquidator must

appear and call the attention of the Court to any matters that

seem to him or her to be relevant, and may give evidence or call

witnesses on the hearing of an application for:


(a) an order under section 78 by the Registrar or the

Official Assignee or the liquidator; or

(b) leave under section 78 by a person against whom an

order has been made on the application of the

Registrar, the Official Assignee, or the

liquidator.

80. Notice of application for order under section 78 – (1)

A person who intends to apply for an order under section 78

must give not less than 10 working days’ notice of that intention

to the person against whom the order is sought.

(2) On the hearing of the application, the person against

whom the order is sought may appear and give evidence or call

witnesses.

81. Application of sections 82 to 84 – Sections 82 to 84

apply to a company:

(a) that has been put into liquidation because of its

inability to pay its debts as and when they

became due; or

(b) the liquidation of which has been completed whether

or not the company has been removed from the

Samoa register; or

(c) that has ceased to carry on business because of its

inability to pay its debts as and when they

became due; or

(d) in respect of which execution is returned unsatisfied

in whole or in part; or

(e) in respect of the property of which a receiver, or a

receiver and manager, has been appointed by a

court or pursuant to the powers contained in a

document, whether or not the appointment has

been terminated; or

(f) in respect of which, or the property of which, a

person has been appointed as a receiver and

manager, or a judicial manager, or as a manager,

or to exercise control, under an enactment,

whether or not the appointment has been

terminated; or

(g) that has entered into a compromise or arrangement

with its creditors.


82. Court may prohibit persons from managing

companies – (1) The Court may, on the application of the

Registrar, make an order that a person must not, without the

leave of the Court, be a director or promoter of a company, or in

any way, whether directly or indirectly, be concerned in, or take

part in the management of, a company for any period, not

exceeding 5 years, that is specified in the order if:

(a) the person was, within a period of 5 years before a

notice was given to that person under section 83

(whether that period commenced before or after

the commencement of this Act), a director of, or

concerned in, or a person who took part in, the

management of a company in relation to which

this section applies; and

(b) the manner in which the affairs of the company were

managed was wholly or partly responsible for

the company being a company in relation to

which this section applies; and

(c) the person bears a significant degree of responsibility

for the manner in which the affairs of the

company were managed.

(2) If a person was, within a period of 5 years before a

notice was given to that person under section 83 (whether that

period commenced before or after the commencement of this

Act), a director of, or concerned in, or a person who took part

in, the management of, 2 or more companies to which this

section applies, subsection (1)(b) and (c) are presumed to be

satisfied in relation to each of those companies unless that

person satisfies the Court to the contrary.

(3) The Registrar must give public notice of the making of

any order under subsection (1).

(4) A person who fails to comply with an order under this

section commits an offence and is liable on conviction to a fine

not exceeding 1000 penalty units or to imprisonment for a term

not exceeding 7 years, or both.

(5) In this section and sections 83 and 84, “company”

includes an overseas company that carries on business in

Samoa.


83. Notice of application – (1) The Registrar must not

make an application under section 82(1) unless:

(a) not less than 10 working days’ notice of the fact

that the Registrar intends to consider making the

application is given to the person and the

Registrar considers any representations made by

the person; and

(b) the Registrar appoints a public accountant to advise

the Registrar in relation to the making of the

application and to inquire into the affairs of the

company under section 314; and

(c) the public accountant appointed under paragraph

(b), after considering the information in the

Registrar’s possession, any representations made

by the person concerned to the Registrar, and if

the public accountant thinks fit, any

representations made by that person to the public

accountant, advises the Registrar that in his or

her professional opinion—

(i) the manner in which the affairs of the

company were managed was wholly or

partly responsible for the company being

a company to which this section applies;

and

(ii) the person bears a significant degree of

responsibility for the manner in which the

affairs of the company were managed.

(2) If the Registrar has made an application under section

82(1) in respect of a person, the Registrar may give a notice to

that person prohibiting that person from being a director or

promoter of a company, or being concerned in, or taking part,

whether directly or indirectly, in the management of, a company

pending the determination by the Court of that application. The

Registrar must give public notice of the notice.

(3) No person to whom a notice under subsection (2) applies

may be a director or promoter of a company, or be concerned or

take part (whether directly or indirectly) in the management of a

company.

(4) If a person to whom the Registrar has issued a notice

under subsection (2) appeals against the issue of the notice

under this Act or otherwise seeks judicial review of the notice,


the notice remains in full force and effect pending the

determination of the appeal or review, as the case may be.

(5) The Registrar may, by notice in writing to a person to

whom a notice under subsection (2) has been given:

(a) revoke that notice; or

(b) exempt that person from the notice in relation to a

specified company or companies, on such

conditions as the Registrar thinks fit. The

Registrar must give public notice of the notice.

(6) A person to whom a notice under subsection (2) is given

who fails to comply with the notice commits an offence and is

liable on conviction to a fine not exceeding 1000 penalty units

or to imprisonment for a term not exceeding 7 years, or both.

84. Liability for contravening section 77, 78, or 82 – (1) A person who acts as a director of a company in contravention

of section 77 or an order made under section 78 is, while that

person was so acting, personally liable to:

(a) a liquidator of the company for any unpaid debt

incurred by the company; and

(b) a creditor of the company for a debt to that creditor

incurred by the company.

(2) A person who acts in contravention of an order or a

notice under section 82 is, while that person was so acting,

personally liable to:

(a) a liquidator of the company for any unpaid debt

incurred by the company; and

(b) a creditor of the company for a debt to that creditor

incurred by the company.

Division 4 – Office of Director

Subdivision A – Appointment and Retirement of Directors

85. Qualifications of directors – (1) A person may be

appointed and hold office as a director of a company only if the

person:

(a) is a natural person; and

(b) is not disqualified from being a director under

subsection (2).


(2) The following persons are disqualified from being a

director of a company:

(a) a person who is under 21 years of age;

(b) a person who is an un-discharged bankrupt;

(c) a person in respect of whom the Court has made an

order under section 189 of the Companies Act

1955 prohibiting that person from being a

director of or being concerned or taking part in

the management of a company, or who would be

so prohibited by virtue of such an order but for

the repeal of that Act;

(d) a person who is prohibited from being a director or

promoter of or being concerned or taking part in

the management of a company under section 77,

78, or 82;

(f) a person who has been adjudged to be mentally

defective under the Mental Health Act 2007;

(g) in relation to any particular company, a person

who does not comply with any qualifications for

directors contained in the rules of that company.

(3) A person who is disqualified from being a director but

who acts as a director is treated as a director for the purposes of

any provision of this Act that imposes a duty or an obligation on

a director of a company.

86. Appointment of directors – (1) A person named as a

director in an application for registration or in an amalgamation

proposal holds office as a director from the date of registration

or the date the amalgamation proposal is effective, as the case

may be, until that person ceases to hold office as a director in

accordance with this Act.

(2) All subsequent directors of a company may, unless the

rules of the company provide otherwise, be appointed by

ordinary resolution.

(3) The appointment of a person as a director is not effective

until that person has consented in writing to act as a director of

the company.

87. Director ceasing to hold office – (1) The office of

director of a company is vacated if the person holding that

office:


(a) resigns in accordance with subsection (2); or

(b) is removed from office in accordance with

subsection (4) or the rules of the company; or

(c) becomes disqualified from being a director under

section 85(2); or

(d) dies; or

(e) otherwise vacates office in accordance with the

rules of the company.

(2) A director of a company may resign by signing a written

notice of resignation and delivering it to the registered office of

the company.

(3) Subject to subsections (5) and (6), the notice is effective

when it is received at that address or at a later time specified in

the notice.

(4) Subject to the company’s rules, a director may be

removed by ordinary resolution.

(5) If a company has only 1 director, that director may not

resign office:

(a) until that director has called a meeting of share-

holders to receive notice of the resignation; or

(b) if the company has only 1 shareholder, until that

director has given not less than 10 working days’

notice of the resignation to that shareholder.

(6) A notice of resignation given by the sole director of a

company does not take effect, despite its terms, until the earlier

of the appointment of another director of the company or:

(a) the time and date for which a meeting of

shareholders is called under subsection (5)(a); or

(b) if the company has only 1 shareholder, 10 working

days after notice of the resignation has been

given to that shareholder.

(7) Despite the vacation of office, a person who held office

as a director remains liable under the provisions of this Act that

impose liabilities on directors in relation to acts and omissions

and decisions made while that person was a director.

88. Notice of change of directors – (1) A company must

ensure that the following notices in the prescribed form are

delivered to the Registrar for registration:

(a) notice of a change in the directors of a company,

whether as the result of a director ceasing to hold


office or the appointment of a new director, or

both;

(b) notice of a change in the name or the residential

address or the postal address of a director of a

company.

(2) A notice under subsection (1) must:

(a) specify the date of the change; and

(b) include the full name and residential address and

postal address of any person who is a director of

the company from the date of the notice; and

(c) in the case of the appointment of a new director,

have attached a consent by that person to act as a

director, in the prescribed form; and

(d) be delivered to the Registrar within 20 working

days of—

(i) the change occurring, in the case of

the appointment or resignation of

a director; or

(ii) the company first becoming aware of

the change, in the case of the

death of a director or a change in

the name or residential address or

postal address of a director.

(3) If a company fails to comply with this section:



units; and

(b) any director of the company commits an offence



Sub-division B – Miscellaneous

89. Remuneration of directors – Directors may receive

remuneration and other benefits from the company:


(b) with the approval of shareholders under section 51.

90. Proceedings of directors – (1) The rules of a company

must include provisions:


(a) for holding meetings of directors of the company;

and

(b) that govern proceedings at meetings of directors of

the company.

(2) Meetings of the directors of a company must be held in

accordance with the rules of the company.

PART 6

ENFORCEMENT

Division 1 – Injunctions

91. Injunctions to require compliance with Act and rules

– (1) Without limiting section 16(2) or this Part, the Court may,

on an application under this section, make an order restraining a

company that, or a director of a company who, proposes to

engage in conduct that would contravene the rules of the

company or this Act from engaging in that conduct.

(2) An application may be made by:

(a) the company; or

(b) a director or shareholder of the company.

(3) If the Court makes an order under subsection (1), it may

also grant any consequential relief that it thinks fit.

(4) An order may not be made under this section in relation

to conduct or a course of conduct that has been completed.

(5) The Court may, at any time before the final

determination of an application under subsection (1), make, as

an interim order, any order that it is empowered to make under

that subsection.

Division 2 – Derivative Actions

92. Leave to bring proceedings – Subject to section 95, the

Court may, on the application of a person referred to in section

93, grant leave to that person:

(a) to bring proceedings in the name and on behalf of

the company or any subsidiary of the company;

or

(b) to intervene in proceedings to which the company

or any subsidiary company is a party for the

purpose of continuing, defending, or


discontinuing the proceedings on behalf of the

company or subsidiary, as the case may be.

93. Who may apply for leave to bring proceedings – An

application for leave to bring proceedings or to intervene in

proceedings under section 92 may be made by:

(a) a director of the company; or

(b) a shareholder or shareholders representing not less

than 10% of the voting rights of all shareholders

entitled to vote on a resolution to amend the

rules of the company.

94. Matters that Court must consider – Without limiting

section 92, in determining whether to grant leave under that

section, the Court must consider:

(a) the likelihood of the proceedings succeeding; and

(b) the costs of the proceedings in relation to the relief

likely to be obtained; and

(c) any action already taken by the company or

subsidiary to obtain relief; and

(d) the interests of the company or subsidiary in the

proceedings being commenced, continued,

defended, or discontinued, as the case may be.

95. When leave may be granted – Leave to bring

proceedings or intervene in proceedings may be granted only if

the Court is satisfied that either:

(a) the company or subsidiary does not intend to bring,

diligently continue or defend, or discontinue the

proceedings, as the case may be; or

(b) it is in the interests of the company or subsidiary

that the conduct of the proceedings should not be

left to the directors or to the determination of the

shareholders as a whole.

96. Procedural matters – (1) Notice of the application

must be served on the company or subsidiary.

(2) The company or subsidiary:

(a) must inform the Court whether or not it intends to

bring, continue, defend, or discontinue the

proceedings, as the case may be; and


(b) may appear and be heard.

(3) Except as otherwise provided, a shareholder is not

entitled to bring or intervene in any proceedings in the name of,

or on behalf of, a company or its subsidiaries.

(4) No proceedings brought or intervened in with leave of

the Court may be settled or compromised or discontinued

without the approval of the Court.

97. Powers of Court – The Court may, at any time, make

any order that it thinks fit in relation to proceedings brought or

intervened in with leave of the Court and, without limitation,

may:

(a) make an order authorising the person to whom

leave was granted or any other person to control

the conduct of the proceedings;

(b) give directions for the conduct of the proceedings;

(c) make an order requiring the company or the

directors to provide information or assistance in

relation to the proceedings;

(d) make an order directing that any amount ordered to

be paid by a defendant in the proceedings must

be paid, in whole or part, to former and present

shareholders of the company or subsidiary

instead of to the company or the subsidiary.

98. Costs of derivative action to be met by company –

The Court may, on the application of the person to whom leave

was granted, order that the reasonable costs of bringing or

intervening in the proceedings, including any costs relating to

any settlement, compromise, or discontinuance approved by the

Court, must be met by the company unless the Court considers

that it would be unjust or inequitable for the company to bear

the whole or part of those costs.

Division 3 – Personal Actions by Shareholders

99. Personal actions by shareholders against company –

(1) A shareholder of a company may bring an action against the

company for breach of a duty owed by the company to him or

her as a shareholder.


(2) The Court may, on the application of a shareholder of a

company, if it is satisfied that it is just and equitable to do so,

make an order requiring the company to take any action that is

required to be taken by the rules of the company or this Act,

whether or not the company owes a duty to the shareholder to

take that action.

(3) On making an order under this section, the Court may

grant any consequential relief that it thinks fit.

100. Personal actions by shareholders against

directors – (1) A shareholder or former shareholder may bring

an action against a director for breach of a duty owed to him or

her as a shareholder.

(2) An action may not be brought under subsection (1) to

recover any loss in the form of a reduction in the value of shares

in the company or a failure of the shares to increase in value by

reason only of a loss suffered, or a gain forgone, by the

company.

(3) The Court may, on the application of a shareholder of a


make an order requiring a director of the company to take any

action that is required to be taken by the directors under the

rules of the company or this Act, whether or not the director

owes a duty to the shareholder to take that action.

(4) On making an order under this section, the Court may

grant any consequential relief that it thinks fit.

101. Representative actions – (1) The Court may appoint a

shareholder of a company to represent all or some of the

shareholders having the same or substantially the same interest

if:

(a) the shareholder brings proceedings against the

company or a director; and

(b) other shareholders have the same, or substantially

the same, interest in relation to the subject-matter

of the proceedings.

(2) On making an order under subsection (1), the Court

may, for that purpose, make any other order that it thinks fit

including, an order:

(a) as to the control and conduct of the proceedings;

(b) as to the costs of the proceedings;


(c) directing the distribution of any amount ordered to

be paid by a defendant in the proceedings among

the shareholders represented.

Division 4 – Prejudiced Shareholders

102. Prejudiced shareholders – (1) A shareholder or

former shareholder of a company may apply to the Court for an

order under subsection (2) if the shareholder considers that the

affairs of a company have been, or are being, or are likely to be,

conducted in a manner that is, or any act or acts of the company

have been, or are, or are likely to be, oppressive, unfairly

discriminatory, or unfairly prejudicial to him or her in that

capacity or in any other capacity.

(2) If the Court considers that it is just and equitable to do

so, it may make any order that it thinks fit, including an order:

(a) requiring the company or any other person to

acquire the shareholder’s shares; or

(b) requiring the company or any other person to pay

compensation to a person; or

(c) regulating the future conduct of the company’s

affairs; or

(d) altering or adding to the company’s rules; or

(e) appointing a receiver of the company; or

(f) directing the rectification of the records of the

company; or

(g) putting the company into liquidation; or

(h) setting aside action taken by the company or the

board in breach of this Act or the rules of the

company.

(3) No order may be made against the company or any other

person under subsection (2) unless the company or that person

is a party to the proceedings in which the application is made.

103. Certain conduct deemed prejudicial – Failure to

comply with section 26(1), 30, 31, 34, 36, 50, or 54 is conduct

that is taken to be unfairly prejudicial for the purposes of

section 102.

104. Alteration to rules by Court – (1) Despite anything in

this Act, but subject to the order, if the Court makes an order


under section 102 altering or adding to the rules of a company,

the rules must not, to the extent that they have been altered or

added to by the Court, again be altered or added to without the

leave of the Court.

(2) An alteration or addition to the rules of a company made

by an order under section 102 has the same effect as if it had

been made by the shareholders of the company under section

14, and this Act applies to the rules as altered or added to.

(3) Within 10 working days of the making of an order under

section 102 altering or adding to the rules of a company, the

company must ensure that a copy of the order and a copy of the

rules as altered or added to are delivered to the Registrar for

registration.




units; and




Division 5 – Certain Applications

105. Effect of arbitration clause in rules – A shareholder

is entitled to apply to the Court for relief under sections 91 to

100 and 102 despite any provision in the rules of a company

requiring disputes relating to the affairs of the company to be

referred to arbitration, or otherwise seeking to prohibit the

shareholder from making the application.

106.Application for relief by Attorney-General – (1) The

Attorney-General may apply to the Court for an order in respect

of a public company under sections 91 to 100 and 102 as if the

Attorney-General were a shareholder of that company if:

(a) the Attorney-General is requested to do so in

writing by a shareholder or shareholders who

would be entitled to make the application in

question; and

(b) the Attorney-General considers that it is in the

public interest that the application be made; and


(c) the Attorney-General considers that it is

unreasonable to expect the person or persons

making the request to pursue the application

themselves.

(2) If the Attorney-General considers that the persons

making a request under subsection (1) should bear some of the

costs of any application to be made by the Attorney-General

under this section, the Attorney-General may require them to

pay an amount towards those costs, or to enter into an

agreement to contribute to those costs. If they fail to do so, the

Attorney-General may decline to make the application, or to

take any further steps in relation to the application.

(3) If an application made by the Attorney-General under

this section results in an award of costs or any other monetary

award in favour of the Attorney-General or the company or the

shareholders of the company, the Attorney-General has a first

claim on that award for payment of the costs incurred by the

Attorney-General in making the application.

PART 7

ADMINISTRATION OF COMPANIES

Division 1 – Dealings With Third Parties

Subdivision A – Binding Company

107. Authority to bind company – (1) A contract or other

enforceable obligation may be entered into by a company as

follows:

(a) an obligation that, if entered into by a natural

person, would, by law, be required to be by deed,

may be entered into on behalf of the company in

writing signed under the name of the company

by—

(i) two or more directors of the company; or

(ii) if there is only 1 director, by that director,

whose signature must be witnessed; or

(iii) if the rules of the company so provide, a

director, or other person or class of

persons. If the rules provide for signature


by 1 person, that person’s signature must

be witnessed; or

(iv) one or more attorneys appointed by the

company under section 108:

(b) an obligation that, if entered into by a natural

person, is, by law, required to be in writing, may

be entered into on behalf of the company—

(i) in the manner specified in paragraph (a); or

(ii) in writing by a person acting under the

company’s express or implied authority:

(c) an obligation that, if entered into by a natural person,

is not, by law, required to be in writing, may be

entered into on behalf of the company by a

person acting under the company’s express or

implied authority.

(2) Nothing in subsection (1) prevents a company from

affixing its common seal to a contract or document, if it has1.

But despite anything in the rules of the company, the absence of

a seal does not affect the enforceability of an obligation entered

into under subsection (1).

(3) Subsection (1) applies to a contract or other obligation

whether or not:

(a) that contract or obligation was entered into in Samoa;

and

(b) the law governing the contract or obligation is the

law of Samoa.

108.Attorneys – (1) Subject to its rules, a company may, by

an instrument in writing executed under section 107(1)(a),

appoint a person as its attorney either generally or in relation to

a specified matter.

(2) An act of the attorney in accordance with the instrument

binds the company.

(3) Part 12 of the Property Law Act 1952 applies, with the

necessary modifications, in relation to a power of attorney

executed by a company to the same extent as if the company

was a natural person and as if the commencement of the

liquidation or, if there is no liquidation, the removal from the

register, of the company was the death of a person within the

meaning of that Part.


109.Validity of dealings with third parties – (1) Subject to

sections 111 and 112, the validity of a transaction entered into

by a company is not affected by:

(a) a failure to comply with this Act (except section

107);

(b) a failure to comply with the company’s rules;

(c) the absence of express authority to enter into the

transaction in the company’s rules;

(d) a failure by the company or its directors to take any

steps required by the company’s rules to

authorise entry into the transaction;

(e) the fact that the transaction is not in the interests of

the company;

(f) a breach of duty by a director in connection with

entry into the transaction.

(2) Subsection (1) does not limit:

(a) section 91 (which relates to injunctions to restrain

conduct by a company that would contravene its

rules); or

(b) sections 92 to 98 (which relates to derivative

actions); or

(c) section 99 (which relates to actions by shareholders

against a company); or

(d) section 100 (which relates to actions by

shareholders against directors); or

(e) the obligations and the liabilities of directors of a

company in respect of any contract or other

obligation, or transfer of property to or by the

company.

(3) In this section and sections 111 to 113, “transaction”:

(a) includes any contract or other obligation entered

into by a company, or any transfer of property to

or by a company; but

(b) does not include—

(i) a distribution to shareholders; or

(ii) an indemnity provided to a director under

section 75; or

(iii) remuneration or other benefits given to a

director in accordance with section 89.


110. Assumptions that may be made by third parties –

(1) Without limiting section 109, neither a company nor any

person claiming under or through a company, nor a guarantor of

an obligation of a company, may assert against a person dealing

with the company or against a person who has acquired

property, rights, or interests from the company that:

(a) a person named as a director of the company in the

most recent notice received by the Registrar

under section 88 or in the most recent annual

return delivered to the Registrar—

(i) is not a director of a company; or

(ii) has not been duly appointed; or

(iii) does not have authority to exercise a power

that a director of a company carrying on

business of the kind carried on by the

company customarily has authority to

exercise:

(b) a person held out by the company as a director,

employee, or agent of the company—

(i) has not been duly appointed; or

(ii) does not have authority to exercise a power

that a director, employee, or agent of a

company carrying on business of the kind

carried on by the company customarily

has authority to exercise;

(c) a person held out by the company as a director,

employee, or agent of the company with

authority to exercise a power that a director,

employee, or agent of a company carrying on

business of the kind carried on by the company

does not customarily have authority to exercise,

does not have authority to exercise that power;

(d) a document issued on behalf of a company by a

director, employee, or agent of the company with

actual or usual authority to issue the document is

not valid or not genuine,–

unless the person has, or ought to have by virtue of his or her

position with or relationship to the company, knowledge of the

matters referred to in any of paragraphs (a) to (d).

(2) Subsection (1) applies even though a person of the kind

referred to in that subsection acts fraudulently or forges a


document that appears to have been signed on behalf of the

company, unless the person dealing with the company or with a

person who has acquired property, rights, or interests from the

company has actual knowledge of the fraud or forgery.

(3) A person is not affected by, or taken to have notice or

knowledge of the contents of, the rules of, or any other

document relating to, a company merely because the rules or

document are:

(a) registered on the Samoa register; or

(b) available for inspection by that person under

Division 2.

111.Transactions in which directors are interested – (1)

A transaction entered into by a company in which a director is

directly or indirectly materially interested is voidable at the

option of the company unless:

(a) this Act or the company’s rules expressly authorise

entry into the transaction despite such an interest;

or

(b) the transaction has been entered into with the

approval of shareholders under section 51

following disclosure of the nature and extent of

the director’s interest to all shareholders who

were not otherwise aware of those matters; or

(c) the other party to the transaction is a person other

than the director or a person associated with the

director and either—

(i) that person did not know of the interest of

the director; or

(ii) the company received fair value under the

transaction.

(2) For the purposes of this section and section 112, a

person is associated with a director if the director:

(a) is the parent, child or spouse of that person; or

(b) is a director, employee or trustee of that person; or

(c) has a material financial interest in that other person.

112. Transactions entered into by directors in breach of

certain duties – A transaction entered into by a company as the

result of action taken by a director in breach of section 65, 66,

or 67 is voidable at the option of the company if:


(a) the other party to the transaction is the director or a

person associated with the director; or

(b) the other party to the transaction is a person with

knowledge of the circumstances giving rise to

the breach of section 65, 66, or 67, and the

company did not receive fair value under the

transaction.

113. Effect on third parties – The setting aside of a

transaction under section 111 or 112 does not affect the title or

interest of a person in or to property that the person has

acquired if the property was acquired:

(a) from a person other than the company; and

(b) for valuable consideration; and

(c) without knowledge of the circumstances that entitle

the company to set aside the transaction under

which the property was acquired from the

company.

Subdivision B – Pre-Incorporation Contracts

114. Pre-incorporation contracts may be ratified – (1) In

this section and in sections 115 and 116, pre-incorporation

contract means:

(a) a contract purporting to be made by a company

before its incorporation; or

(b) a contract made by a person on behalf of a company

before and in contemplation of its incorporation.

(2) Despite any enactment or rule of law, a pre-

incorporation contract may be ratified by the company within

any period that may be specified in the contract, or if no period

is specified, then within a reasonable time after the

incorporation of the company in the name of which, or on

behalf of which, it has been made.

(3) A pre-incorporation contract that is ratified is as valid

and enforceable as if the company had been a party to the

contract when it was made.

(4) A pre-incorporation contract may be ratified by a

company in the same manner as a contract may be entered into

on behalf of a company under section 107.


(5) Despite any other Act, if a pre-incorporation contract has

not been ratified by a company, or validated by the Court under

section 116, the company may not enforce it or take the benefit

of it.

115. Warranties implied in pre-incorporation contracts

– (1) Despite any enactment or rule of law, in a pre-

incorporation contract, unless a contrary intention is expressed

in the contract, there is an implied warranty by the person who

purports to make the contract in the name of, or on behalf of,

the company:

(a) that the company will be incorporated within the

period specified in the contract, or if no period is

specified, then within a reasonable time after the

making of the contract; and

(b) that the company will ratify the contract within the

period specified in the contract, or if no period is

specified, then within a reasonable time after the

incorporation of the company.

(2) The amount of damages recoverable in an action for

breach of a warranty implied by subsection (1) is the same as

the amount of damages that would be recoverable in an action

against the company for damages for breach by the company of

any unperformed obligations under the contract if the contract

had been ratified.

(3) If, after its incorporation, a company enters into a

contract in the same terms as, or in substitution for, a pre-

incorporation contract (not being a contract ratified by the

company under section 114), the liability of a person under

subsection (1) (including any liability under an order made by

the Court for the payment of damages) is discharged unless a

contrary intention is expressed in the pre-incorporation contract.

116. Failure to ratify – (1) A party to a pre-incorporation

contract that has not been ratified by the company after its

incorporation may apply to the Court for an order:

(a) directing the company to return to that party

property of any kind acquired by the company

from that party by virtue of the contract; or

(b) for any other relief in favour of that party relating to

the property.


(2) The Court may, if it considers it just and equitable to do

so, make any order or grant any relief that it thinks fit and may

do so whether or not an order has been made under section

115(2).

Division 2 – Company Records

117. Company records – (1) Subject to section 119, a

company must keep the following documents at its registered

office:

(a) the rules of the company;

(b) minutes of all meetings and resolutions of share-

holders within the last 7 years;

(c) minutes of all meetings and resolutions of directors

and directors’ committees within the last 7 years;

(d) the full names and addresses of the current

directors;

(e) copies of all written communications to all share-

holders or all holders of the same class of shares

during the last 7 years, including annual reports;

(f) the accounting records required by section 129 for

the current accounting period and for the last 7

completed accounting periods of the company;

(g) copies of all financial statements required to be

completed under section 130 for the last 7


(h) the share register.

(2) The references in subsection (1)(b), (c), and (e) to 7

years and the references in subsection (1)(f) and (g) to 7

completed accounting periods include any lesser periods that

the Registrar may approve by notice in writing to the company.




units; and




118. Form of records – (1) The records of a company must

be kept:


(a) in written form; or

(b) in a form or in a manner that allows the records to

be readily accessible so as to be usable for

subsequent reference, and convertible into

written form

(2) The directors must ensure that adequate measures exist

to:

(a) prevent the records being falsified; and

(b) detect any falsification of them.

(3) If the directors fail to comply with subsection (2), every

director commits an offence and is liable on conviction to a fine

not exceeding 50 penalty units.

119. Alternative locations of records – (1) The records

referred to in section 117(1)(a) to (g) may be kept at a place in

Samoa other than the company’s registered office, provided that

notice of that place is given to the Registrar in accordance with

subsection (7).

(2) The share register may, if expressly permitted by the

rules, be divided into 2 or more registers kept in different

places.

(3) The principal register must be kept in Samoa. Any other

share register may be kept at a place outside Samoa.

(4) If a share register is divided into 2 or more registers kept

in different places:

(a) notice of the place where each register is kept must

be delivered to the Registrar in accordance with

subsection (7) within 10 working days after the

share register is divided or any place where a

register is kept is altered; and

(b) a copy of the register must be kept at the same

place as the principal register; and

(c) if an entry is made in a register other than the

principal register, a corresponding entry must be

made within 10 working days in the copy of that

register kept with the principal register.

(5) In this section, “principal register”, in relation to a

company, means:

(a) if the share register is not divided into 2 or more

registers, the share register; or


(b) if the share register is divided into 2 or more

registers, the register described as the principal

register in the last notice sent to the Registrar

under this section.

(6) A company need not keep its accounting records in

Samoa, but if the records are not kept in Samoa:

(a) the company must ensure that accounts and returns

for the operations of the company that—

(i) disclose with reasonable accuracy the

financial position of the company at

intervals not exceeding 6 months; and

(ii) will enable the preparation in accordance

with this Act of the company’s financial

statements and any other document

required by this Act; –

are sent to, and kept at, a place in Samoa; and

(b) notice of the place where—

(i) the accounting records; and

(ii) the accounts and returns required under

paragraph (a),–

are kept must be given to the Registrar under subsection (7).

(7) If any records are not kept at the registered office of the

company, or the place at which they are kept is changed, the

company must ensure that within 10 working days of their first

being kept elsewhere or moved, as the case may be, notice is

given to the Registrar of the places where the records are kept.

(8) If a company fails to comply with subsection (3), (4),

(6), or (7):



units; and




120. Inspection of records by directors – (1) Subject to

subsection (2), the director of a company is entitled, on giving

reasonable notice, to inspect the records of the company:

(a) in written form; and

(b) without charge; and

(c) at a reasonable time specified by the director.


(2) The Court may, on application by the company, direct

that the records need not be made available for inspection or

limit the inspection of them in any manner it thinks fit if it is

satisfied that:

(a) it would not be in the company’s interests for a

director to inspect the records; or

(b) the proposed inspection is for a purpose that is not

properly connected with the director’s duties.

121. Inspection of records by shareholders – (1) A

company must keep the following records available for

inspection in the manner prescribed in section 123 by a

shareholder of the company, or by a person authorised in

writing by a shareholder for the purpose, who serves written

notice of intention to inspect on the company:

(a) minutes of all meetings and resolutions of share-

holders:

(b) copies of written communications to all

shareholders or to all holders of a class of shares

during the preceding 7 years, including annual

reports and financial statements;

(c) the records that must be available for public

inspect-ion under section 122.




units; and

(b) every director of a company commits an offence



122. Inspection of records by public – (1) A company

must keep the following records available for inspection in the

manner prescribed in section 123 by any person who serves

written notice of intention to inspect on the company:

(a) the certificate of incorporation or registration of the

company;

(b) the rules of the company, if they differ from the

model rules;

(c) the share register;


(d) the full names and residential addresses of the

directors;

(e) details of the registered office of the company and

of its postal address, if different from the

registered office;

(f) details of any place other than the registered office

at which records are kept in accordance with

section 119.




units; and




123. Manner of inspection – (1) Documents that may be

inspected under section 121 or 122 must be available for

inspection at the place at which the company’s records are kept

between the hours of 9.00 am and 4.00 pm on each working day

during the inspection period.

(2) In this section, “inspection period” means the period

commencing on the third working day after the day on which

notice of intention to inspect is served on the company by the

person or shareholder concerned and ending with the 8th

working day after the day of service.

(3) A person may require a copy of, or extract from, a

document that is available for inspection by him or her under

section 121 or 122 to be sent to him or her:

(a) within 5 working days after he or she has made a

request in writing for the copy or extract; and

(b) if he or she has paid a reasonable copying and

administration fee prescribed by the company.

(4) If a company fails to provide a copy of, or extract from,

a document in accordance with a request under subsection (3):



units; and





Division 3 – Documents to be sent to

Registrar and Shareholders

124. Annual returns – (1) The directors of a company must

ensure that there is delivered to the Registrar each year, for

registration, during the month allocated to the company for the

purpose, an annual return:

(a) in the prescribed form or in a form approved by the

Registrar by public notice or in a form approved

by the Registrar for use by the company under

subsection (8), or as near to it as circumstances

allow; and

(b) containing the prescribed information or the

information approved by the Registrar by public

notice; and

(c) accompanied by the prescribed annual return fee.

(2) The annual return must be dated as at a day within the

month during which the return is required to be delivered to the

Registrar, and the information required to be contained in it

must be compiled as at that date.

(3) The annual return must be signed by a director of the

company or by a solicitor or public accountant authorised for

that purpose.

(4) On registration of a company under Part 2 or re-

registration under Part 14, the Registrar must allocate a month

to the company for the purposes of this section.

(5) The Registrar may, by written notice to a company, alter

the month allocated to the company under subsection (4).

(6) Despite subsection (1):

(a) a company need not make an annual return in the

calendar year of its incorporation;

(b) a subsidiary may, with the written approval of the

Registrar, make an annual return during the

month allocated to its holding company instead

of during the month allocated to it.

(7) Different forms of annual return may be prescribed or

approved by the Registrar by public notice in respect of

different classes of companies.

(8) The Registrar may, on the application of any person,

approve the use, by such company or companies as the


Registrar may specify, of a form of annual return different from

that prescribed or approved by the Registrar by public notice,

and may at any time revoke, in whole or in part, any such

approval.


subsection (1) or (2), every director of the company commits an


penalty units.

125.Registrar may send annual return form to company

– (1) The Registrar may send to a company an annual return

form that sets out the prescribed information as it appears on the

Samoa register:

(a) for approval under section 124(3) if the information

set out in the form is current as at a date in the

month in which the return is required to be

made; or

(b) for any correction as may be required, and approval

of the corrected information under section

124(3).

(2) If the annual return contains:

(a) an address of the registered office of the company;

or

(b) a postal address of the company that is different

from the address of the registered office or the

postal address of the company entered on the

Samoa register, the Registrar may alter the

Samoa register accordingly.

126. Other documents to be sent to Registrar – In

addition to the annual return required under section 124, a

company must send the following documents to the Registrar

under this Act:

(a) notice of the adoption of new rules by a company,

or the alteration of the rules of a company, under

section 14;

(b) notice of a change in the registered office or postal

address of the company under section 18;

(c) notice of the issue of shares by the company, under

section 26;


(d) notice of the acquisition by the company of its own

shares under section 31;

(e) notice of the redemption of a share under section

35;

(f) notice of a change in the directors of the company,

or of a change in the name or residential address

of a director, under section 88;

(g) notice of the making of an order under section 102

altering or adding to the rules of a company;

(h) notice of any place other than the registered office

of the company where records are kept, or of any

change in the place where records are kept, under

section 119;

(i) documents requested by the Registrar under section

312.

127. Annual report to shareholders – An annual report

must be sent to shareholders in accordance with section 56.

128. Other documents to be sent to shareholders – In

addition to any annual report required under section 56, a

company must send the following documents to shareholders:

(a) notice of any repurchase of shares to which section

31(4) applies;

(b) notice of a written resolution approved under

section 52;

(c) financial statements required to be sent under

section 130;

(d) a written statement by an auditor under section 136;

(e) a report by an auditor under section 138.

Division 4 – Accounting and Audit

129. Accounting records to be kept – (1) The directors of

a company must ensure accounting records are kept that:

(a) correctly record and explain the transactions of the

company; and

(b) will at any time enable the financial position of the

company to be determined with reasonable

accuracy; and


(c) will enable the directors to ensure that the financial

statements of the company comply with section

130 and any regulations made under this Act;

and

(d) will enable the financial statements of the company

to be readily and properly audited.

(2) Without limiting subsection (1), the accounting records

must contain:

(a) entries of money received and spent each day and

the matters to which it relates; and

(b) a record of the assets and liabilities of the company;

and

(c) if the company’s business involves dealing in

goods—

(i) a record of goods bought and sold, and

relevant invoices; and

(ii) a record of stock held at the end of the

financial year together with records of

any stock takings during the year; and

(d) if the company’s business involves providing

services, a record of services provided and

relevant invoices.

(3) If a company sells goods or provides services for cash in

the ordinary course of carrying on a retail business:

(a) invoices need not be kept in respect of each retail

transaction for the purposes of subsection (2);

and

(b) a record of the total money received each day in

respect of the sale of goods or provision of

services, as the case may be, is sufficient to

comply with subsection (2) in respect of those

transactions.

(4) The accounting records must be kept:

(a) in a form permitted under section 118; and


place permitted under section 119.

(5) If the directors of a company fail to comply with the

requirements of this section, every director of the company

commits an offence and is liable on conviction to a fine not



130. Financial statements to be prepared – (1) The

directors of any company must ensure that:

(a) within 4 months after the balance date of the

company, or within any extended period

applicable under subsection (3), financial

statements that comply with subsection (2) are

completed in relation to the company and that

balance date; and

(b) within 20 working days of the date on which the

financial statements must be completed under

paragraph (a), those financial statements are sent

to all shareholders. This requirement may be

satisfied by sending the financial statements to

shareholders in an annual report in accordance

with section 56.

(2) The financial statements of a company must:

(a) give a true and fair view of the matters to which

they relate; and

(b) comply with any applicable regulations made under

this Act; and

(c) be dated and signed on behalf of the directors by 2

directors of the company, or, if the company has

only 1 director, by that director.

(3) The period within which a private company must

comply with the requirements of subsection (1)(a) may be

extended by special resolution to a period not greater than 7

months.

(4) The following periods must not exceed 15 months:

(a) the period between the date of incorporation of a

company and its first balance date;

(b) the period between any 2 balance dates of a

company.




penalty units.

131. Application – (1) This section and sections 132 to 134

apply to a company in respect of an accounting period if:

(a) it is registered as a public company at any time

during that accounting period; or


(b) the company’s rules require it to appoint an auditor

in respect of that accounting period; or

(c) a shareholder or shareholders holding shares that

together carry the right to receive more than 20%

of distributions made by the company give

written notice to the company before the end of

the accounting period requiring the financial

statements of the company for that period to be

audited.

(2) If this section and sections 132 to 134 apply to a

company in respect of an accounting period, but do not apply in

respect of a subsequent accounting period:

(a) the financial statements of the company for the

accounting period in respect of which this

section applies must be audited; and

(b) the directors may give notice to all shareholders

within 4 months of the commencement of a

subsequent accounting period that this section

and sections 132 to 134 no longer apply to the

company and that the auditor will cease to hold

office unless a notice is given by shareholders

under subsection (1)(c) by a date specified in the

notice, which must be not less than 30 working

days from the date on which the notice is given;

and

(c) if a notice has been given under paragraph (b), and

no notice under subsection (1)(c) is received by

the company by the date specified in that notice,

the auditor ceases to hold office on the later of—

(i) the date specified in the notice; or

(ii) the date on which the audit of the financial

statements of the company for the

previous accounting period is completed.

132.Appointment of auditor – (1) A company to which

this section applies must appoint an auditor:

(a) to hold office as auditor until the auditor ceases to

hold office under section 133; and

(b) to audit the financial statements of the company.

(2) A company must appoint an auditor within 30 working

days of:


(a) the date on which this section first applies to the

company;

(b) any vacancy arising in the office of auditor.

133. When auditor ceases to hold office – An auditor

ceases to hold office if he or she:

(a) ceases to hold office under section 131(2); or

(b) resigns by delivering a written notice of resignation

to the registered office of the company not less

than 20 working days before the date on which

the notice is expressed to be effective; or

(c) becomes disqualified from being the auditor of the

company under section 135; or

(d) is replaced as auditor by an ordinary resolution

appointing another person as auditor in his or her

place, following notice to the auditor in

accordance with section 136(2); or

(e) dies; or

(f) is adjudged to be mentally defective under the

Mental Health Act 2007.

134. Registrar may appoint auditor on request of

shareholder – (1) The Registrar may, at the request of any

shareholder, appoint an auditor if:

(a) this section applies to a company; and

(b) the company has neglected or failed to appoint an

auditor.

(2) If the Registrar appoints an auditor, the Registrar may

determine the fees to be paid by the company to the auditor.

(3) Any fees determined by the Registrar may be recovered

as if they were provided for in a contract between the company

and the auditor.

135. Qualifications of auditor – (1) A person must not be

appointed or act as an auditor of a company unless:

(a) the person is entitled to practise as a public

accountant; or

(b) if the audit is to be carried out outside Samoa, the

person is eligible to act as an auditor in the

country, state, or territory in which the audit is to

be carried out, and—


(i) the person is a member, fellow, or associate

of an association of accountants

constituted outside Samoa that has been

approved for the time being for the

purposes of this section by the Registrar

by public notice; or

(ii) the person has been approved for the time

being for the purposes of this section by

the Registrar by public notice.

(2) The following persons must not be appointed or act as

auditor of a company:

(a) a director or secretary or employee of the company,

or any other person responsible for keeping the

accounting records of the company;

(b) a person who is a partner, or in the employment, of

a person referred to in paragraph (a);

(c) a liquidator or administrator or a person who is a

receiver in respect of the property of the

company;

(d) a corporation;

(e) a person who, by virtue of any of paragraphs (a) to

(c), may not be appointed or act as auditor of a

related company.

136. Statement by auditor in relation to resignation or

removal – (1) If an auditor resigns from office, the directors

must, if requested to do so by that auditor:

(a) distribute to all shareholders, at the expense of the

company, a written statement of the auditor’s

reasons for resigning; or

(b) permit the auditor or his or her representative to

explain at a shareholders’ meeting the reasons

for the resignation.

(2) A company must not appoint a new auditor in the place

of an auditor who is qualified to hold that office, unless:

(a) at least 20 working days’ written notice of a

proposal to do so has been given to the auditor;

and

(b) the auditor has been given a reasonable opportunity

to make representations to the shareholders on

the appointment of another person either in


writing or by the auditor or his or her

representative speaking at a shareholders’

meeting (whichever the auditor may choose).

(3) An auditor is entitled to be paid reasonable fees and

expenses by the company for making the representations to

shareholders referred to in subsection (1) or (2).

137. Auditor to avoid conflict of interest – An auditor of a

company must ensure, in carrying out the duties of an auditor

under this Part, that his or her judgement is not impaired by

reason of any relationship with or interest in the company or

any related company.

138. Auditor’s report – The auditor of a company to which

sections 131 to 134 apply must make a report to the

shareholders on the financial statements audited by him or her

that states:

(a) the work done by the auditor; and

(b) the scope and limitations of the audit; and

(c) the existence of any relationship (other than that of

auditor) that the auditor has with, or any interests

that the auditor has in, the company or any

related company; and

(d) whether the auditor has obtained all information

and explanations that he or she has required; and

(e) whether, in the auditor’s opinion, as far as appears

from an examination of them, proper accounting

records have been kept by the company; and

(f) whether, in the auditor’s opinion and having regard

to any information or explanations that may have

been added by the company, the financial

statements—

(i) give a true and fair view of the matters to

which they relate; and

(ii) comply with any applicable regulations

made under this Act, and, if they do not ,

the respects in which they fail to give

such a view or comply with such

requirements, as the case may be; and

(g) any other matter prescribed for the purposes of this

section by regulations made under this Act.


139.Access to information – (1) The directors of a

company must ensure that an auditor of the company has access

at all times to the accounting records and other documents of

the company.

(2) An auditor of a company is entitled to require from a

director or employee of the company such information and

explanations that he or she thinks necessary for the performance

of his or her duties as auditor.


subsection (1), every director commits an offence and is liable

on conviction to a fine not exceeding 50 penalty units.

(4) A director or employee who fails to comply with

subsection (2) commits an offence and is liable on conviction to

a fine not exceeding 50 penalty units.

(5) It is a defence to an employee charged with an offence

against subsection (4) if the employee proves that:

(a) he or she did not have the information required in

his or her possession or under his or her control;

or

(b) by reason of the position occupied by him or her or

the duties assigned to him or her, he or she was

unable to give the explanations required.

140.Auditor’s attendance at shareholders’ meeting – (1)

The directors of a company must ensure that an auditor of the

company:

(a) is permitted to attend a meeting of shareholders of

the company; and

(b) receives the notices and communications that a

shareholder is entitled to receive relating to

meetings and resolutions of shareholders; and

(c) may be heard at a meeting of shareholders that he

or she attends on any part of the business of the

meeting that concerns him or her as auditor.




penalty units.

PART 8


AMALGAMATIONS, ETC

Division 1 – Amalgamations

141. Amalgamations – Two or more companies may

amalgamate, and continue as 1 company, in accordance with

this Division.

142. Notice of proposed amalgamation – The directors of

each amalgamating company must, not less than 20 working

days before the amalgamation is proposed to take effect:

(a) send a copy of the amalgamation proposal to any

secured creditor of the company; and

(b) give public notice of the proposed amalgamation,

including a statement that—

(i) copies of the amalgamation proposal are

available for inspection by any

shareholder or creditor of an

amalgamating company or any person to

whom an amalgamating company is

under an obligation at the registered

offices of the amalgamating companies

and at any other places specified during

normal business hours; and

(ii) a shareholder or creditor of an

amalgamating company or any person to

whom an amalgamating company is

under an obligation is entitled to be

supplied free of charge with a copy of the

amalgamation proposal on request to an

amalgamating company.

143. Registration of amalgamation proposal – For the

purpose of effecting an amalgamation the following documents

must be delivered to the Registrar for registration:

(a) an amalgamation proposal approved in accordance

with Schedule 6;

(b) a certificate signed by the directors of each

amalgamating company stating that the

amalgamation has been approved in accordance

with this Act and the company’s rules;


(c) a document in the prescribed form signed by each

of the persons named in the amalgamation

proposal as a director of the amalgamated

company containing his or her consent to be a

director.

144. Certificate of amalgamation – (1) Immediately after

receipt of the documents required under section 143, the

Registrar must issue a certificate of amalgamation in the

prescribed form.

(2) If an amalgamation proposal specifies a date on which

the amalgamation is intended to become effective, and that date

is the same as, or later than, the date on which the Registrar

receives the documents, the certificate of amalgamation must be

expressed to have effect on the date specified in the

amalgamation proposal.

145. Effect of certificate of amalgamation – On the date

shown in a certificate of amalgamation:

(a) the amalgamation is effective; and

(b) subject to section 10, the amalgamated company

has the name specified in the amalgamation

proposal; and

(c) the amalgamated company is entitled to all the

property, rights, powers, and privileges of each

of the amalgamating companies; and

(d) the amalgamated company is subject to all the

liabilities and obligations of each of the

amalgamating companies; and

(e) proceedings pending by, or against, an

amalgamating company may be continued by, or

against, the amalgamated company; and

(f) a conviction, ruling, order, or judgment in favour

of, or against, an amalgamating company may be

enforced by, or against, the amalgamated

company; and

(g) any provisions of the amalgamation proposal that

provide for the conversion of shares or rights of

shareholders in the amalgamating companies

have effect according to their tenor.


146.Registers – (1) If an amalgamation becomes effective,

neither the Registrar of Land nor any other person charged with

the keeping of any books or registers is obliged, solely by

reason of the amalgamation becoming effective, to change the

name of an amalgamating company to that of an amalgamated

company in those books or registers or in any documents.

(2) The presentation to the Registrar of Land or any other

person of any instrument (whether or not comprising an

instrument of transfer) by the amalgamated company:

(a) executed or appearing to be executed by the

amalgamated company; and

(b) relating to any property held immediately before the

amalgamation by an amalgamating company;

and

(c) stating that that property has become the property

of the amalgamated company by virtue of this

Division,–

is, in the absence of evidence to the contrary, sufficient

evidence that the property has become the property of the

amalgamated company.

(3) Without limiting subsection (1) or (2), if any security

issued by any person or any rights or interests in property of any

person become, by virtue of this Division, the property of an

amalgamated company, that person, on presentation of a

certificate signed on behalf of the amalgamated company,

stating that that security or any such rights or interests have, by

virtue of this Division, become the property of the amalgamated

company, must, despite any other enactment or rule of law or

the provisions of any instrument, register the amalgamated

company as the holder of that security or as the person entitled

to such rights or interests, as the case may be.

(4) Except as expressly provided in this section, nothing in

this Division derogates from the provisions of the Land Titles

Registration Act 2008.

147. Powers of Court in relation to amalgamations – (1)

If the Court is satisfied that giving effect to an amalgamation

proposal would unfairly prejudice a shareholder or creditor of

an amalgamating company or a person to whom an

amalgamating company is under an obligation, it may, on the

application, made at any time before the date on which the


amalgamation becomes effective, of that person, make any

order it thinks fit in relation to the proposal, and may, without

limiting the generality of this section, make an order:

(a) directing that effect must not be given to the

proposal;

(b) modifying the proposal in such manner as may be

specified in the order;

(c) directing the company or its directors to reconsider

the proposal or any part of it.

(2) An order may be made under subsection (1) on any

conditions that the Court thinks fit.

Division 2 – Approval of Amalgamations, etc., by Court

148.Interpretation – In this Division, unless the context

otherwise requires:

“arrangement” includes a reorganisation of the share capital

of a company by the consolidation of shares of different

classes, or by the division of shares into shares of

different classes, or by both those methods;

“company”:

(a) means a company; and

(b) includes an overseas company that is registered on

the overseas register.

149. Approval of amalgamations, etc. – (1) Subject to

section 150, but despite any other provision or the rules of a

company, the Court may, on the application of a company or

any shareholder or creditor of a company, order that an

amalgamation, arrangement, or compromise is binding on the

company and on any other persons or classes of persons

specified by the Court.

(2) The order may be made on any conditions that the Court

thinks fit.

(3) An order made under this section has effect on and from

the date specified in the order.

150.When Court may approve amalgamation, etc. – (1)

An amalgamation, arrangement, or compromise may be

approved under this Division only if it is not practicable for the


amalgamation, arrangement, or compromise to be effected

under Division 1 or 2 of Part 9, or under both.

(2) To avoid doubt, it is not impracticable for an

amalgamation, arrangement, or compromise to be effected

under Division 1 or 2 of Part 9 by reason only that the

compromise has not been, or would not be likely to be,

approved under the procedures set out in those Divisions.

151. Initial Court orders – (1) Before making an order

under section 149(1), the Court may, on the application of the

company or any shareholder or creditor or other person who

appears to the Court to be interested, or of its own motion, make

any 1 or more of the following orders:

(a) an order that notice of the application, together with

such information relating to it as the Court thinks

fit, be given in the form and manner and to any

persons or classes of persons specified by the

Court;

(b) an order directing the holding of a meeting or

meetings of shareholders or any class of

shareholders or creditors or any class of creditors

of a company to consider and, if thought fit, to

approve, in such manner as the Court may

specify, the proposed arrangement or

amalgamation or compromise and, for that

purpose, the Court may determine the

shareholders or creditors that constitute a class of

shareholders or creditors of a company;

(c) an order requiring that a report on the proposed

arrangement or amalgamation or compromise be

prepared for the Court by a person specified by

the Court and, if the Court thinks fit, be supplied

to the shareholders or any class of shareholders

or creditors or any class of creditors of a

company or to any other person who appears to

the Court to be interested;

(d) an order as to the payment of the costs incurred in

the preparation of the report;

(e) an order specifying the persons who are entitled to

appear and be heard on the application to


approve the amalgamation, arrangement, or

compromise.

(2) In making an order under subsection (1), the Court must

have regard to the procedures for amalgamations under Division

1 and for compromises under Division 2 of Part 9.



152. Court may make additional orders – (1) Without

limiting section 149, the Court may, for the purpose of giving

effect to any amalgamation, arrangement, or compromise

approved under that section, either by the order approving the

amalgamation, arrangement, or compromise, or by any later

order, provide for, and prescribe terms and conditions relating

to:

(a) the transfer or vesting of real or personal property,

assets, rights, powers, interests, liabilities,

contracts, and engagements;

(b) the issue of shares, securities, or policies of any

kind;

(c) the continuation of legal proceedings;

(d) the liquidation of any company;

(e) the provisions to be made for persons who voted

against the amalgamation, arrangement, or

compromise at any meeting called in accordance

with any order made under section 151(1)(b) or

who appeared before the Court in opposition to

the application to approve the amalgamation,

arrangement, or compromise;

(f) any other matters that are necessary or desirable to

give effect to the amalgamation, arrangement, or

compromise.



153.Copy of orders to be delivered to Registrar – (1) Within 10 working days of an order being made by the Court

under this Division, the company must ensure that a copy of the

order is delivered to the Registrar for registration.





154. Application of section 209 – Section 209 applies, with

the necessary modifications, to any compromise approved under

section 149.

PART 9

INSOLVENT COMPANIES

155. Unregistered company charges void – A charge,

mortgage or other pledge that is not registered under any other

Act governing the registration or filing of charges, mortgages or

other pledges against company property is void as against the

administrator, the liquidator, receiver and any creditor of the

company.

Division 1 – Administrations

156. Purpose – (1) The purpose of this Division and

Schedules 8 to 12 is to provide for the business, property, and

affairs of an insolvent company to be administered in a way

that:

(a) maximises the chances of the company, or the

whole or any part of its business, continuing in

existence as a viable business; or

(b) results in a better return for the company’s creditors

and shareholders than would result from an

immediate liquidation of the company.

(2) The provisions relating to administrations are set out in:

(a) this Division; and

(b) Schedules 8 and 9, which apply to administrators;

and

(c) Schedule 10, which sets out the effect of

administration; and

(d) Schedule 11, which applies to creditors’

committees; and

(e) Schedule 12, which, with the necessary

modifications, applies to meetings of creditors.


Sub-division A – Beginning of Administration

157. When administration begins – (1) The administration

of a company begins when an administrator of the company is

appointed.

Sub-division B – How Administrator may be Appointed

158. Appointment of administrator – (1) An administrator

of a company may be appointed by:

(a) the board of directors of a company; or

(b) if the company is in liquidation, the liquidator; or

(c) if an interim liquidator has been appointed, the

interim liquidator; or

(d) a charge holder holding a charge over the whole, or

substantially the whole, of the company’s

property; or

(e) the Court.

(2) If the company is already in administration, an

administrator may be appointed only by:

(a) the Court; or

(b) the creditors, as a replacement administrator for an

administrator that the creditors have removed; or

(c) the appointer of the first administrator, if that

administrator has died, resigned, or become

disqualified.

(3) The following persons must not be appointed as an

administrator:

(a) a person who must not be appointed as an

administrator under clause 1 of Schedule 9,

unless the Court orders otherwise;

(b) a person who has not consented in writing to his or

her appointment as an administrator.

(4) A person who acts as an administrator in contravention

of subsection (3)(a) commits an offence and is liable on


159.Directors may appoint administrator – (1) The board

of directors of a company may appoint an administrator of the

company if the board of directors has resolved at a meeting

called under section 71 that:


(a) in the opinion of the directors voting for the

resolution, the company is unable, or is likely to

become unable, to pay its debts in the normal

course of business; and

(b) an administrator of the company should be

appointed for the purposes of achieving 1 of the

purposes set out in section 156.

(2) Subsection (1) does not apply:

(a) to a company that is already in liquidation;

(b) if a receiver has been appointed in respect of the

whole of the property of the company, unless the

person by whom the receiver was appointed has

consented to the appointment of an

administrator;

(c) if an administrator has been appointed on a

previous occasion, unless leave of the Court is

first obtained.

(3) The appointment must be in writing.

160. Liquidator or creditors may appoint administrator

– (1) A liquidator or interim liquidator of a company may

appoint an administrator of the company if the liquidator or

interim liquidator is of the opinion that:

(a) the company is unable, or is likely to become

unable, to pay its debts in the normal course of

business; and

(b) an administrator should be appointed for the

purposes of achieving one of the purposes set out

in section 156.

(2) A liquidator or interim liquidator of a company may,

with the leave of the Court, appoint himself or herself as an

administrator.


(4) The appointment of any administrator while the

company is in liquidation does not terminate the appointment of

the liquidator or interim liquidator unless the Court makes such

an order under section 256 on the application of the liquidator

or interim liquidator, or of the administrator.

161. Secured creditor may appoint administrator – (1) A

person who is entitled to enforce a charge over all of a


company’s property may appoint an administrator of the

company if:

(a) the charge has become, and is still, enforceable; and

(b) the secured creditor is of the opinion that an

administrator should be appointed for the

purposes of achieving 1 of the purposes under

section 156.

(2) Subsection (1) does not apply to a company that is

already in liquidation.


162. Appointment of administrator not to be revoked –

The appointment of a person as administrator of a company

may be revoked only:

(a) by order of the Court under section 163; or

(b) by a decision of creditors under section 179 or

under clause 6 of Schedule 9 to appoint another

person as administrator of the company.

163.Court may remove administrator – On the

application of the Registrar or of a creditor of the company

concerned, the Court may:

(a) remove from office the administrator of a company

under administration or under a compromise

approved under this Division; and

(b) subject to section 158(1), appoint another person as

administrator of the company or under the

compromise.

Sub-division C – Notices

164. Notices given by administrator – (1) An

administrator of a company must:

(a) lodge a notice of the appointment with the Registrar

before the end of the next working day after the

appointment; and

(b) give public notice of the appointment within 10

working days after the appointment; and

(c) before the end of the next working day after the

administrator is appointed, give a written notice

of the appointment to—


(i) a person who holds a charge on all of the

company’s property; and

(ii) a person who holds 1 or more charges on

property of the company if the property

of the company subject to the charges

constitutes all, or substantially all, of the

company’s property; and

(iii) a secured party who holds a registered

charge.

(2) An administrator need not give a notice under subsection

(1)(c) to the person who appointed the administrator.

165. Notice given by secured creditor – Before the end of

the next working day after appointing an administrator of a

company, the secured creditor must give to the company a

written notice of the appointment.

166. Requirements for notices given under section 164 or

165 – A notice given under section 164 or 165 must be in the

prescribed form and must contain:

(a) the full name of the administrator; and

(b) the date of appointment of the administrator; and

(c) the administrator’s business address, telephone and

fax numbers, and email address (if any).

167.Notice of administration – (1) A company under

administration must set out, in an agreement entered into or

document issued, and in a negotiable instrument, by the

company, after the company’s name where it first appears, the

expression “(administrator appointed)” or, if an administrator

has been appointed under section 160, the expression

“(administrator appointed and in liquidation)”.

(2) A person who fails to comply with subsection (1)



Sub-division D – Investigation of Company’s Affairs

168.Administrator to investigate company’s affairs – As

soon as practicable after the administration of a company

begins, the administrator must:


(a) investigate the company’s business, property,

affairs, and financial circumstances; and

(b) form an opinion about each of the following

matters—

(i) whether it would be in the interests of the

company’s creditors to approve a

compromise binding on the company and

its creditors or a class of creditors;

(ii) whether it would be in the creditors’

interests for the administration to end:

(iii) whether it would be in the creditors’

interests for a liquidator of the company

to be appointed.

169. Directors to deliver documents to administrator –

As soon as practicable after the administration of a company

begins, each director of the company must:

(a) deliver to the administrator all records and

documents in the director’s possession that relate

to the company and that the director is not

entitled, as against the company and the

administrator, to retain; and

(b) if the director knows where other records and

documents relating to the company are, tell the

administrator where they are.

170. Directors to give administrator statement of

company’s affairs – (1) Within 5 working days after the

administration of a company begins, the directors must give to

the administrator a statement about the company’s business,

property, affairs, and financial circumstances.

(2) The administrator may extend the time for compliance

with subsection (1).

(3) The administrator must table the directors’ statement:

(a) at the first creditors’ meeting; or

(b) if the administrator has extended the time for

compliance by the directors, at the watershed

meeting.


171. Directors must give administrator other

information – A director of a company under administration

must:

(a) attend on the administrator at any times that the

administrator reasonably requires; and

(b) give the administrator all information about the

company’s business, property, affairs, and

financial circumstances that the administrator

reasonably requires.

172. Offence not to comply with sections 169 to 171 – A

person who, without reasonable excuse, fails to comply with

any of sections 169 to 171 commits an offence and is liable on


Sub-division E – Administrator’s Rights to Company’s

Documents

173. Restriction on enforcement of lien over company’s

documents – (1) A person is not entitled, as against the

administrator of a company, to:

(a) retain possession of records and documents of the

company; or

(b) claim or enforce a lien on them.

(2) A lien is not, apart from subsection (1), otherwise

prejudiced.

174. Delivery of company’s documents held by secured

creditor – (1) Section 173 does not apply to a secured creditor

who, otherwise than because of a lien, is entitled to possession

of records and documents of a company.

(2) Despite subsection (1), an administrator is, at any

reasonable time, entitled to inspect, and make copies of, those

records and documents.

175. Notice to deliver company’s documents to

administrator – (1) An administrator may give to a person a

written notice requiring the person to deliver to the

administrator the records and documents that are specified in

the notice and that are in the person’s possession.


(2) A notice under subsection (1) must specify a period of at

least 3 working days as the period within which the notice must

be complied with.

176. Offence not to comply with sections 173 to 175 – A

person who fails to comply with any of sections 173 to 175



Sub-division F – First Creditors’ Meeting

177. Preparation for first creditors’ meeting – An

administrator of a company must:

(a) compile and maintain, for each class of creditors of

the company, a list of creditors known to the

administrator, setting out—

(i) the amount owing or estimated to be

owing to each of them; and

(ii) the number of votes that each of

them is entitled to case at a

meeting of creditors held under

this Division; and

(b) within 10 working days after the administration

begins, hold a first creditors’ meeting.

178. Notice of first creditors’ meeting – At least 5 working

days before the first creditors’ meeting, the administrator must

give:

(a) written notice of the meeting to all secured parties

who hold a registered charge over any property

of the company; and

(b) written notice of the meeting to as many of the

company’s other creditors as reasonably

practicable; and

(c) public notice of the meeting.

179. Proceedings at first creditors’ meeting – (1) At the

first creditors’ meeting, the company’s creditors may, by

resolution:


(a) determine whether to appoint a creditors’

committee, and, if so, appoint the committee’s

members; and

(b) appoint someone else as administrator of the

company; or

(c) end the administration.

(2) Schedule 11 applies to creditors’ committees.

(3) Schedule 12 applies, with the necessary modifications,

to meetings of creditors held under this Division (including

meetings of creditors’ committees).

180. Offence not to comply with section 177 or 178 – A

person who does not comply with section 177 or 178 commits

an offence and is liable on conviction to a fine not exceeding 50

penalty units.

Sub-division G – Reports by Administrators

181. Reports by administrator – (1) In the circumstances

set out in subsection (2), an administrator of a company must:

(a) lodge a report with the Registrar about the matter as

soon as practicable; and

(b) give the Registrar any information, and access to

any facilities for inspecting and taking copies of

documents, that the Registrar requires.

(2) The circumstances are that it appears to the administrator

that:

(a) a past or present officer, or a shareholder, of the

company may have been guilty of an offence in

relation to the company; or

(b) a person who has taken part in the formation,

promotion, administration, management, or

liquidation of the company may have –

(i) misapplied or retained, or may have become

liable or accountable for, money or

property (in Samoa or elsewhere) of the

company; or

(ii) been guilty of negligence, default, breach of

duty, or breach of trust in relation to the

company.


(3) The administrator may also lodge further reports

specifying any other matter that, in his or her opinion, should be

brought to the Registrar’s notice.

182. Court may direct administrator to lodge report –

(1) In the circumstances set out in subsection (2), the Court

may, on the application of an interested person or of its own

motion, direct the administrator to lodge a report.

(2) The circumstances are that:

(a) it appears to the Court that—

(i) a past or present officer, or a share-holder,

of a company under administration has

been guilty of an offence in relation to

the company; or

(ii) a person who has taken part in the

formation, promotion, administration,

management or liquidation of a company

under administration has engaged in

conduct of a kind referred to in section

181(2)(b)(i) or (ii) in relation to the

company; and

(b) the administrator has not lodged a report about the

matter.

Sub-division H – Watershed Meeting

183. What is watershed meeting – The watershed meeting

is the meeting of creditors called by the administrator to decide

the future of the company and, in particular, whether the

company and creditors should enter into a compromise under

Division 2.

184. Administrator must convene watershed meeting –

(1) The administrator must convene the watershed meeting

within the convening period.

(2) The convening period is the period of 20 working days

after the date on which the administrator is appointed, and

includes any period for which it is extended under subsection

(3).

(3) The Court may, on the administrator’s application,

extend the convening period, but must not do so if the


application is made after the convening period has expired,

unless the Court is satisfied that a substantial injustice will

result if the convening period is not extended.

185. Notice of watershed meeting – (1) The administrator

must convene the watershed meeting by:

(a) giving written notice of the meeting to as many of

the company’s creditors as reasonably

practicable; and

(b) publishing a notice of the meeting in a national

newspaper.

(2) The administrator must take the steps in subsection (1)

not less than 5 working days before the meeting.

(3) The notice given to creditors under subsection (1)(a)

must be accompanied by:

(a) a report by the administrator about the company’s

business, property, affairs, and financial

circumstances and setting out the basis of

remuneration or proposed remuneration of the

administrator; and

(b) a statement setting out the administrator’s opinion

(including his or her reasons for the opinion)

about each of the following matters—

(i) whether it would be in the creditors’

interests for the company to enter into a

compromise that is binding on the

company and its creditors or a class of

creditors;

(ii) whether it would be in the creditors’

interests for the administration to end;

(iii) whether it would be in the creditors’

interests for a liquidator of the company

to be appointed; and

(c) if a compromise is proposed, a statement setting out

details of the proposed compromise in

accordance with section 205(2)(b), but it is not

necessary for the administrator to give a separate

notice under that section; and

(d) a copy of the list or lists of creditors referred to in

section 177.


186.When watershed meeting must be held – (1) The

watershed meeting must be held within 5 working days after the

end of the convening period or extended convening period, as

the case may be.

(2) The watershed meeting may be adjourned, but only to a

day that is not more than 30 working days after the first day on

which the meeting was held.

(3) However, the Court may, on the administrator’s

application, order that the meeting be adjourned for more than

30 working days.

187. What creditors may decide at watershed meeting –

(1) At a watershed meeting, the creditors may resolve:

(a) to approve a compromise that is binding on its

creditors or a class of creditors as specified in the

resolution (even if it differs from the proposed

compromise (if any), details of which

accompanied the notice of meeting, as a result of

any amendment adopted at the meeting); or

(b) that the administration should end; or

(c) if the administrator has so recommended that a

liquidator of the company be appointed.

(2) Despite anything in Schedule 12:

(a) a resolution for the purposes of subsection (1)(a) is

adopted if a majority in number and value of the

creditors or class of creditors voting in person or

by proxy vote in favour of the resolution; and

(b) section 206(3) applies to such a resolution.

Sub-division I – End of Administration

188. When administration ends – The administration of a

company ends on the happening of whichever event of a kind

referred to in section 189 or 190 happens first after the

administration begins.

189. Normal way for administration to end – The normal

outcome of the administration of a company is that:

(a) a compromise is approved by creditors that is

binding on the company and its creditors or a

class of creditors; or


(b) the company’s creditors resolve that the

administration should end; or

(c) the company’s creditors resolve that a liquidator of

the company be appointed.

190. Other ways in which administration may end – The

administration of a company may also end because:

(a) the Court orders that the administration is to end,

for example, because the Court is satisfied that

the company is solvent; or

(b) the convening period for a watershed meeting

ends—

(i) without the meeting being convened in

accordance with section 185; and

(ii) without an application being made for the

Court to extend the convening period for

the watershed meeting; or

(c) an application for the Court to extend the convening

period is finally determined or otherwise

disposed of other than by the Court extending the

convening period; or

(d) the convening period, as extended, ends without the

meeting being convened in accordance with

section 185; or

(e) a watershed meeting called under section 183 ends

(whether or not it was earlier adjourned) without

a resolution under section 187(1) being passed at

the meeting; or

(f) the Court appoints an interim liquidator of the

company or appoints a liquidator of the

company.

191. Notice of end of administration – If a meeting of the

company’s creditors resolves that the administration should end,

or resolves that a liquidator be appointed, the administrator

must, immediately after the declaration of the result of the

resolution of creditors:

(a) lodge a notice with the Registrar that the

administration is at an end or that a liquidator

has been appointed, as the case may be; and


(b) cause a public notice to be published that the

administration is at an end or than a liquidator

has been appointed, as the case may be.

Sub-division J – Creditors’ Resolution Approving Compromise

192. Effect of creditors’ resolution approving

compromise – If, at a creditors’ meeting, a company’s creditors

approve a compromise:

(a) the administrator of the company is the

administrator under the compromise unless the

creditors, by resolution passed at the meeting,

appoint someone else to be administrator under

the compromise; and

(b) the administrator must prepare a document setting

out the terms of the compromise (compromise

document).

193. Contents of compromise document – The

compromise document must specify all the following:

(a) the administrator of the compromise and the basis

for determining his or her remuneration;

(b) the property of the company (whether or not

already owned by the company when it executes

the deed) that is to be available to pay creditors'

claims;

(c) the nature and duration of any moratorium period

for which the compromise provides;

(d) to what extent (if any) the company is to be

released from its debts;

(e) the conditions (if any) for the compromise to come

into operation;

(f) the conditions (if any) for the compromise to

continue in operation;

(g) the circumstances in which the compromise

terminates;

(h) the order in which proceeds of realising the

property referred to in paragraph (b) will be

distributed among creditors bound by the

compromise;


(i) the day (not later than the day when the

administration began) on or before which

creditors’ claims must have arisen if they are to

be admissible under the compromise;

(j) any other matters prescribed by regulations.

194. Application of Division 2 to compromise proposed

by administrator – Except as otherwise expressly provided by

this Division, Division 2 applies to a compromise proposed by

an administrator.

195. Notice of approval of compromise – (1) Within 10

working days after a compromise is approved at a creditors’

meeting, the administrator must:

(a) send a written notice of the result of the voting of

the creditors to—

(i) each creditor of the company; and

(ii) the company; and

(iii) any receiver of the company; and

(iv) any liquidator of the company; and

(b) give public notice of the result of the voting of the

creditors; and

(c) give written notice of the voting of the creditors to,

and lodge a copy of the compromise document

with, the Registrar.




Sub-division K – Creditors’ Resolution Approving Appointment

of Liquidator

196. Creditors’ resolution approving appointment of

liquidator – (1) If a company’s creditors approve the

appointment of a liquidator:

(a) subject to section 197, the administrator is the

liquidator with effect from the date and at the

time at which the resolution is passed; and

(b) the liquidator need not—

(i) call a meeting of creditors; or

(ii) give a notice under section 238(1); or


(iii) give public notice if the liquidator has

lodged a notice with the Registrar under

section 238(2); but

(c) except as expressly provided otherwise, Division 3

applies, with the necessary modifications, to the

liquidation.

(2) The administrator must record the time and date at

which the resolution was passed or the contravention occurred

and the time and date at which the administration begins.

197. Appointment of person other than administrator to

be liquidator – (1) The creditors may, by resolution, appoint a

named person other than the administrator to be the liquidator

of the company.

(2) If that person has consented in writing to the

appointment before it is made, that person is the liquidator with

effect from the date and time at which the resolution is passed.

(3) If subsection (2) does not apply, that person becomes

liquidator with effect from the date and time at which he or she

consents in writing to the appointment, and until such time the

administrator is the liquidator in accordance with section

196(1).

198. Notice of appointment of liquidator – Within 10

working days after the day on which the liquidator is appointed

at a creditors’ meeting, the liquidator must lodge with the

Registrar a written notice:

(a) stating that a liquidator of the company has been

appointed; and

(b) specifying the date on, and time at, which the

liquidation begins.

Sub-division L – Protection of Persons during Administration

199. Protection of persons dealing with administrator,

etc. – (1) A person is entitled, in relation to the person’s

dealings with an administrator of a company or another person

who has, or appears to have, directly or indirectly acquired title

to property of the company from the administrator, to assume

that:


(a) the company’s rules and this Act have been

complied with;

(b) any person who appears, from information provided

by the administrator or company that is available

to the public, to be an administrator of the

company—

(i) has been appointed; and

(ii) has authority to exercise the powers and

perform the functions customarily

exercised or performed by an

administrator of a similar company:

(c) anyone who is held out by an administrator or the

company to be an agent of the administrator or

an officer or agent of the company—

(i) has been appointed; and

(ii) has authority to exercise the powers and

perform the functions customarily

exercised or performed by that kind of

officer or agent of a similar company or

by that kind of agent of the administrator:

(d) the administrator, officers and agents of the

company, and agents of the administrator,

properly perform their duties to the company;

(e) a document has been duly executed by the company

if the document appears to have been signed by

the administrator;

(f) a document has been executed by a company that

has a common seal if—

(i) the company’s common seal appears to have

been fixed to the document; and

(ii) the fixing of the common seal appears to

have been witnessed by the

administrator:

(g) an administrator of the company who has authority

to issue a document or a certified copy of a

document on its behalf also has authority to

warrant that the document is genuine or is a

copy.

(2) Subsection (1):


(a) applies even if the administrator or an officer or

agent of the company acts fraudulently, or forges

a document, in connection with the dealings; but

(b) does not apply if the person who is entitled to make

the assumptions in that subsection knew or

suspected that the assumption was incorrect.

200. Validity of things done during administration – A

payment made, transaction entered into, or any other act or

thing done, in good faith, by, or with the consent of, the

administrator of a company under administration:

(a) is valid and effectual for the purposes of this Act;

and

(b) is not liable to be set aside in a liquidation of the

company.

201.General power to make orders – (1) The Court may,

on any conditions that it thinks fit, make any order that it thinks

appropriate about how this Division is to operate in relation to

the administration of a particular company (for example, that

the administration of the company is to end).

(2) An order may be made on the application of:

(a) the company; or

(b) a creditor of the company; or

(c) for a company under administration, the

administrator of the company; or

(d) for a company that has entered into a compromise,

the administrator (if any) under the compromise;

or

(e) the Registrar; or

(f) any other interested person.

202. Court orders protecting creditors or shareholders –

The Court may, on the application of the Registrar or of a

creditor or shareholder of a company, make any order that the

Court thinks just if the Court is satisfied that the administrator

of a company under administration, or under a compromise:

(a) has managed, or is managing, the company’s

business, property, or affairs in a way that is

prejudicial to the interests of some or all of the

company's creditors or shareholders; or


(b) has acted or has not acted, or proposes to act or not

to act, in a way that is or would be prejudicial to

those interests.

203.Court orders to protect creditors during

administration – (1) The Court may, on the application of the

Registrar or of a creditor of a company, make any order that it

thinks necessary to protect the interests of the company’s

creditors while the company is under administration.

(2) An order may be made subject to conditions.

Division 2 – Compromises With Creditors

204. Compromise proposal – Any of the following persons

may propose a compromise under this Division if that person

has reason to believe that a company is or will be unable to pay

its debts as they become due in the normal course of business:

(a) the directors of the company;

(b) a receiver appointed in relation to the whole or

substantially the whole of the assets and

undertaking of the company;

(c) a liquidator or an administrator of the company.

205. Notice of proposed compromise – (1) The proponent

must compile, in relation to each class of creditors of the

company, a list of creditors known to the proponent who would

be affected by the proposed compromise, setting out:

(a) the amount owing or estimated to be owing to each

of them; and

(b) the number of votes that each of them is entitled to

cast on a resolution to approve the compromise.

(2) The proponent must give to each known creditor, the

company, any receiver or liquidator, and deliver to the Registrar

for registration:

(a) notice in accordance with Schedule 12 of the

intention to hold a meeting of creditors, or any 2

or more classes of creditors, for the purpose of

voting on the resolution; and

(b) a statement—


(i) containing the name and address of the

proponent and the capacity in which the

proponent is acting; and

(ii) containing the address and telephone

number to which inquiries may be

directed during normal business hours;

and

(iii) setting out the terms of the proposed

compromise and the reasons for it; and

(iv) setting out the reasonably foreseeable

consequences for creditors of the

company of the compromise being

approved; and

(v) setting out the extent of any interest of a

director in the proposed compromise; and

(vi) explaining that the proposed compromise

and any amendment to it proposed at a

meeting of creditors or any classes of

creditors will be binding on all creditors,

or on all creditors of that class, if

approved in accordance with section 206;

and

(vii) containing details of any procedure

proposed as part of the proposed

compromise for varying the compromise

following its approval; and

(c) a copy of the list or lists of creditors referred to in

subsection (1).

206. Effect of compromise – (1) A compromise, including

any amendment proposed at the meeting, is approved by

creditors, or a class of creditors, if, at a meeting class of

creditors conducted under Schedule 12, the compromise,

including any amendment, is adopted under that Schedule.

(2) A compromise, including any amendment, approved by

creditors or a class of creditors of a company under this

Division is binding on the company and on all creditors, or, if

there is more than 1 class of creditors, on all creditors of that

class, to whom notice of the proposal was given.

(3) If a resolution proposing a compromise, including any

amendment, is put to the vote of more than 1 class of creditors,


it is to be presumed, unless the contrary is expressly stated in

the resolution, that the approval of the compromise, including

any amendment, by each class is conditional on the approval of

the compromise, including any amendment, by any other class

voting on the resolution.

(4) The proponent must give written notice of the result of

the voting to each known creditor, the company, any receiver or

liquidator, and the Registrar.

207. Variation of compromise – (1) An approved

compromise may be varied or terminated either:

(a) in accordance with any procedure for variation or

termination incorporated in the compromise as

approved; or

(b) by the approval of a proposal to vary or terminate

the compromise in accordance with this Division

that, for that purpose, applies, with all necessary

modifications, as if any the proposal were a

proposed compromise.

(2) This Division applies to any compromise that is varied

under this section.

208. Powers of Court – (1) On the application of the

proponent or the company, the Court may:

(a) give directions in relation to a procedural

requirement imposed by this Division, or waive

or vary any such requirement, if it is satisfied

that it would be just to do so; or

(b) order that, during a period specified in the order,

beginning not earlier than the date on which

notice was given of the proposed compromise

and ending not later than 10 working days after

the date on which notice was given of the result

of the voting on it—

(i) proceedings in relation to a debt owing by

the company be stayed; or

(ii) a creditor refrain from taking any other

measure to enforce payment of a debt

owing by the company.

(2) Nothing in subsection (1)(b) affects the right of a

secured creditor during that period to take possession of, realise,


or otherwise deal with, property of the company over which that

creditor has a charge.

(3) The Court may order that the creditor is not bound by

the compromise or make any other order that it thinks fit if the

Court is satisfied, on the application of a creditor of a company

who was entitled to vote on a compromise, that:

(a) not enough notice of the meeting or of the matter

required to be notified under section 205 was

given to that creditor; or

(b) there was some other material irregularity in

obtaining approval of the compromise; or

(c) in the case of a creditor who voted against the

compromise, the compromise is unfairly

prejudicial to that creditor, or to the class of

creditors to which that creditor belongs.

(4) An application under subsection (3) must be made not

later than 10 working days after the date on which notice of the

result of the voting was given to the creditor.

209. Effect of compromise in liquidation of company –

(1) If a compromise is approved, the Court may, on the

application of:

(a) the company; or

(b) a receiver appointed in relation to property of the

company; or

(c) with the leave of the Court, any creditor or

shareholder of the company,–

make an order as the Court thinks fit with respect to the extent,

if any, to which the compromise will, if the company is put into

liquidation, continue in effect and be binding on the liquidator

of the company.

(2) If a compromise is approved and the company is later

put into liquidation, the Court may, on the application of any

person described in subsection (3), make an order that the Court

thinks fit with respect to the extent, if any, to which the

compromise will continue in effect and be binding on the

liquidator of the company.

(3) The person referred to in subsection (2) is:

(a) the liquidator; or

(b) a receiver appointed in relation to property of the

company; or


(c) with the leave of the Court, any creditor or share-

holder of the company.

210. Costs of compromise – Unless the Court orders

otherwise, the costs incurred in organising and conducting a

meeting of creditors for the purpose of voting on a proposed

compromise:

(a) must be met by the company; or

(b) if incurred by a receiver or an administrator or a

liquidator, are a cost of the receivership or

administration or liquidation; or

(c) if incurred by any other person, are a debt due to

that person by the company.

Division 3 – Liquidations

Sub-division A – Purpose

211. Purpose – (1) The purpose of this Division and

Schedules 12 to 18 is to provide for a liquidator of a company:

(a) to take possession of, protect, realise, and distribute

the assets, or the proceeds of the realisation of

the assets, of the company to its creditors in

accordance with this Act; and

(b) if there are surplus assets remaining, to distribute

them, or the proceeds of the realisation of the

surplus assets, in accordance with section 251.

(2) The provisions relating to liquidations are set out in:

(a) this Division; and

(b) Schedule 12, which, with the necessary

modifications, applies to meetings of creditors;

and

(c) Schedules 13 and 14, which apply to liquidators;

and

(d) Schedule 15, which sets out the effect of

liquidation; and

(e) Schedule 16, which applies to liquidation

committees; and

(f) Schedule 17, which applies to voidable transactions

and charges and recoveries in other cases in a

liquidation; and


(g) Schedule 18, which applies to creditors’ claims.

Sub-division B – Beginning of Liquidation

212. When liquidation begins – (1) The liquidation of a

company begins on the date on which, and at the time at which,

the liquidator is appointed.

(2) The liquidator may be a named person or an Official

Assignee.

(3) If any question arises as to whether on the date on which

a liquidator was appointed an act was done or a transaction was

entered into or effected before or after the time at which the

liquidator was appointed, that act or transaction is, in the

absence of proof to the contrary, taken to have been done or

entered into or effected, as the case may be, after that time.

Sub-division C – Restrictions on Appointment of Liquidator

213. Restrictions on appointment of liquidator – (1) Unless the Court orders otherwise, none of the persons referred

to in clause 1 of Schedule 14 may be appointed or act as a

liquidator of a company.

(2) The appointment of a person as a liquidator is of no

effect unless that person has consented in writing to the

appointment.

(3) A person who acts as a liquidator in contravention of

subsection (1) commits an offence and is liable on conviction to

a fine not exceeding 50 penalty units.

214. Restrictions on appointment of Official Assignee –

An Official Assignee may be appointed liquidator of a company

only:

(a) if a special resolution of shareholders is passed by

reason of the Official Assignee exercising voting

rights attaching to shares in the company of -

(i) a person who has been adjudged bankrupt;

or

(ii) another company of which the Official

Assignee is liquidator; or

(b) by the Court.


Sub-division D – How Liquidator may be Appointed

215.Board may appoint liquidator – (1) A liquidator may

be appointed by the resolution of the board of directors of the

company on the occurrence of an event specified in the

company’s rules.

(2) The board of directors of the company must record in the

document appointing the liquidator the date on which, and the

time at which, the liquidator was appointed.

216.Shareholders may appoint liquidator – (1) A

liquidator may be appointed by special resolution of those

shareholders entitled to vote and voting on the question.

(2) The shareholders must record in the special resolution

appointing the liquidator the date on which, and the time at

which, the special resolution was passed.

217.Creditors may appoint liquidator – A liquidator may

be appointed by resolution of the creditors of the company

under administration under section 187(1)(c).

218.Court may appoint liquidator – (1) A liquidator may

be appointed by the Court on the application of:

(a) the company; or

(b) a director of the company; or

(c) a shareholder of the company; or

(d) a creditor of the company (including any contingent

or prospective creditor); or

(e) an administrator under a compromise approved at a

creditors’ meeting; or

(f) the Registrar.

(2) The Court may appoint a liquidator if it is satisfied that:

(a) the company is unable to pay its debts; or

(b) the company or the directors have persistently or

seriously failed to comply with this Act; or

(c) it is just and equitable that the company be put into

liquidation.

(3) The Court must record in the order appointing the

liquidator the date on which, and the time at which, the order

was made.


219. Interim liquidator – (1) If an application has been

made to the Court for an order that a company be put into

liquidation, the Court may, if it is satisfied that it is necessary or

expedient for the purpose of maintaining the value of assets

owned or managed by the company, appoint a named person, or

an Official Assignee, as interim liquidator.

(2) Subject to subsection (3), an interim liquidator has the

rights and powers of a liquidator to the extent necessary or

desirable to maintain the value of assets owned or managed by

the company, including power to appoint an administrator.

(3) The Court may limit the rights and powers of an interim

liquidator in such manner as it thinks fit.

(4) The appointment of an interim liquidator takes effect on

the date on which, and at the time at which, the order appointing

that interim liquidator is made.

(5) The Court must record in the order appointing the

interim liquidator the date on which, and the time at which, the

order was made.

(6) If any question arises as to whether on the date on which

an interim liquidator was appointed an act was done or a

transaction was entered into or effected before or after the time

at which the interim liquidator was appointed, that act or

transaction is, in the absence of proof to the contrary, taken to

have been done or entered into or effected, as the case may be,

after that time.

220. Meaning of unable to pay its debts – Unless the

contrary is proved, and subject to section 221, a company is

presumed to be unable to pay its debts if:

(a) the company has failed to comply with a statutory

demand; or

(b) execution issued against the company in respect of

a judgment debt has been returned unsatisfied in

whole or in part; or

(c) a person entitled to a charge over all or substantially

all of the property of the company has appointed

a receiver under the document creating the

charge; or

(d) a compromise between a company and its creditors

has been put to a vote in accordance with

Division 2.


221.Evidence and other matters – (1) On an application to

the Court for an order that a company be put into liquidation,

evidence of failure to comply with a statutory demand is not

admissible as evidence that a company is unable to pay its debts

unless the application is made within 30 working days after the

last date for compliance with the demand.

(2) Section 220 does not prevent proof by other means that a

company is unable to pay its debts.

(3) Information or records acquired under section 57 or, if

the Court so orders, under section 62, may be received as

evidence that a company is unable to pay its debts.

(4) In determining whether a company is unable to pay its

debts, contingent or prospective liabilities may be taken into

account.

(5) An application to the Court for an order that a company

be put into liquidation on the ground that it is unable to pay its

debts may be made by a contingent or prospective creditor only

with the leave of the Court; and the Court may give such leave,

with or without conditions, only if it is satisfied that a prima

facie case has been made out that the company is unable to pay

its debts.

222.Statutory demand – (1) A statutory demand is a

demand by a creditor in respect of a debt owing by a company

made in accordance with this section.

(2) A statutory demand must:

(a) be in respect of a debt that is due and is not less

than the prescribed amount; and

(b) be in writing; and

(c) be served on the company; and

(d) require the company to do any of the following

things to the reasonable satisfaction of the

creditor, within 15 working days of the date of

service, or any longer period that the Court may

order—

(i) pay the debt;

(ii) enter into a compromise under Division 2;

(iii) otherwise compound with the creditor;

(iv) give a charge over its property to secure

payment of the debt.


223.Court may set aside statutory demand – (1) The

Court may, on the application of the company, set aside a

statutory demand.

(2) The application must be:

(a) made within 10 working days of the date of service

of the demand; and

(b) served on the creditor within 10 working days of

the date of service of the demand.

(3) No extension of time may be given for making or

serving an application to have a statutory demand set aside, but,

at the hearing of the application, the Court may extend the time

for compliance with the statutory demand.

(4) The Court may grant an application to set aside a

statutory demand if it is satisfied that:

(a) there is a substantial dispute whether or not the debt

is owing or is due; or

(b) the company appears to have a counterclaim, set-

off, or cross-demand and the amount specified in

the demand less the amount of the counterclaim,

set-off, or cross-demand is less than the

prescribed amount; or

(c) the demand ought to be set aside on other grounds.

(5) A demand must not be set aside by reason only of a

defect or irregularity unless the Court considers that substantial

injustice would be caused if it were not set aside.

(6) In subsection (5), “defect” includes a material mis-

statement of the amount due to the creditor and a material mis-

description of the debt referred to in the demand.

(7) An order under this section may be made subject to

conditions.

224. Additional powers of Court on application to set

aside statutory demand – (1) If, on the hearing of an

application under section 223, the Court is satisfied that there is

a debt due by the company to the creditor that is not the subject

of a substantial dispute, or is not subject to a counterclaim, set-

off, or cross-demand, the Court may, on the ground that the

company is unable to pay its debts:

(a) order the company to pay the debt within a

specified period and that, in default of payment,


the creditor may make an application to put the

company into liquidation; or

(b) dismiss the application and immediately make an

order putting the company into liquidation.

(2) For the purposes of the hearing of an application to put

the company into liquidation under an order made under

subsection (1)(a), the company is presumed to be unable to pay

its debts if it failed to pay the debt within the specified period

under the order.

Sub-division E – Notices

225.Notices given by liquidator – (1) A liquidator must,

immediately after being appointed or being notified of his or her

appointment, give public notice of:

(a) the liquidator’s appointment; and

(b) the date and time of the commencement of the

liquidation; and

(c) the address, telephone, fax numbers and email

address to which, during normal business hours,

inquiries may be directed by a creditor or

shareholder.

(2) A liquidator must, within 10 working days of being

appointed or being notified of his or her appointment, deliver to

the Registrar for registration a notice of the liquidator’s

appointment.

226. Documents to state company in liquidation – A

document entered into, made, or issued by a liquidator of a

company on behalf of the company must state in a prominent

position that the company is in liquidation.

Sub-division F – Obligations to Liquidators

227.Directors, etc., to identify and deliver company

property – (1) A present or former director or employee of a

company in liquidation must:

(a) immediately after the company is put into

liquidation, give the liquidator details of property

of the company in his or her possession or under

his or her control; and


(b) on being required to do so by the liquidator,

immediately or within any time that may be

specified by the liquidator, deliver the property

to the liquidator or any other person that the

liquidator may direct, or dispose of the property

in any manner that the liquidator may direct.



exceeding 250 penalty units or to imprisonment for a term not

exceeding 2 years, or both.

228. Obligations of suppliers of essential services – (1)

Despite any other Act or any contract, a supplier of an essential

service must not:

(a) refuse to supply the service to a liquidator, or to a

company in liquidation, by reason of the

company's default in paying charges due for the

service in relation to a period before the

commencement of the liquidation; or

(b) make it a condition of the supply of the service to a

liquidator, or to a company in liquidation, that

payment be made of outstanding charges due for

the service in relation to a period before the

commencement of the liquidation; or

(c) make it a condition of the supply of the service to a

company in liquidation that the liquidator

personally guarantees payment of the charges

that would be incurred for the supply of the

service.

(2) The charges incurred by a liquidator for the supply of an

essential service are an expense incurred by the liquidator for

the purposes of clause 16(a) of Schedule 18.

Sub-division G – Liquidators’ Rights to Company’s Documents

229. Liquidator may require director, etc., to deliver

documents – A liquidator may, by notice in writing, require a

director or shareholder of the company or any other person to

deliver to the liquidator any records or documents of the

company in that person’s possession or under that person’s

control as the liquidator requires.


230. Liquidator may require director, etc., to provide

information – (1) A liquidator may by notice in writing,

require the following persons to do any of the things specified

in subsection (2):

(a) a director or former director of the company;

(b) a shareholder of the company;

(c) a person who was involved in the promotion or

formation of the company;

(d) a person who is, or has been, an employee of the

company;

(e) a receiver, administrator, accountant, auditor, bank

officer, or other person having knowledge of the

affairs of the company;

(f) a person who is acting or who has at any time acted

as a solicitor for the company.

(2) A person referred to in subsection (1) may be required

to:

(a) attend on the liquidator at such reasonable time or

times and at such place as may be specified in

the notice;

(b) provide the liquidator with such information about

the business, accounts, or affairs of the company

as the liquidator requests;

(c) be examined on oath or affirmation by the

liquidator or by a barrister or solicitor acting on

behalf of the liquidator on any matter relating to

the business, accounts, or affairs of the company;

(d) assist in the liquidation to the best of the person’s

ability.

(3) Without limiting subsection (2)(a), a person may be

required to attend on the liquidator under that subsection at a

meeting of creditors of the company.

231. Reasonable expenses may be paid – (1) Without

limiting subsection (2), the liquidator may pay to a person

referred to in section 230(1)(d), (e), or (f) who is not an

employee of the company reasonable travelling and other

expenses in complying with a requirement of the liquidator

under that section.


(2) The Court may, on the application of the liquidator or a

person referred to in section 230(1)(d), (e), or (f) who is not an

employee of the company, order that that person is entitled to

receive reasonable remuneration and travelling and other

expenses in complying with a requirement of the liquidator

under that section.

(3) A person referred to in section 230(1)(d), (e), or (f) is

not entitled to refuse to comply with a requirement of the

liquidator under that section by reason only that:

(a) an application to the Court to be paid remuneration

or travelling and other expenses has not been

made or determined; or

(b) remuneration or travelling and other expenses to

which that person is entitled have not been paid

in advance; or

(c) the liquidator has not paid that person travelling or

other expenses.

232. Examination by liquidator – (1) A liquidator or a

barrister or solicitor acting on behalf of the liquidator may

administer an oath to, or take the affirmation of, a person

required to be examined under section 230.

(2) A person required to be examined under section 230 is

entitled to be represented by a barrister or solicitor.

(3) A liquidator, or a barrister or solicitor acting on behalf of

the liquidator, who conducts an examination under section 230

must ensure that the examination is recorded in writing or by

means of a sound recording, video camera and sound recording

or other similar means.

233. Court may order person to comply with section 229

– (1) The Court may, on the application of the liquidator, order

a person who has failed to comply with a requirement of the

liquidator under section 230 to comply with that requirement.

(2) The Court may, on the application of the liquidator,

order a person to whom section 230 applies:

(a) to attend before the Court and be examined on oath

or affirmation by the Court or the liquidator, or a

barrister or solicitor acting on behalf of the

liquidator, on any matter relating to the business,

accounts, or affairs of the company;


(b) to produce any documents relating to the business,

accounts, or affairs of the company in that

person’s possession or under that person’s

control.

(3) If a person is examined under subsection (2)(a):

(a) the examination must be recorded in writing; and

(b) the person examined must sign the record.

(4) Subject to any directions by the Court, a record of an

examination under this section is admissible in evidence in any

proceedings under section 78 or this Division.

234.Self-incrimination no excuse – (1) A person is not

excused from answering a question in the course of being

examined under section 230 or 233 on the ground that the

answer may incriminate or tend to incriminate that person.

(2) The testimony of the person examined is not admissible

as evidence in criminal proceedings against that person except

on a charge of perjury in relation to that testimony.

235. Restriction on enforcement of lien over company’s

documents – (1) A person is not entitled, as against the

liquidator of a company, to claim or enforce a lien over

documents of the company.

(2) If the lien arises in relation to a debt for the provision of

services to the company before the commencement of the

liquidation, the debt is a preferential claim against the company

under section 250 to the extent of $500 or such greater amount

as may be prescribed at the commencement of the liquidation.

(3) Nothing in this section applies to a company that was

put into liquidation under section 215 or 216 if:

(a) the directors of the company passed a resolution of

the kind referred to in section 242; and

(b) section 243 does not apply in relation to the

company.

236.Delivery of document held by secured creditor – (1)

A person is required to deliver a document to a liquidator under

section 229 even though possession of the document creates a

charge over property of a company.

(2) Production of the document to the liquidator does not

prejudice the existence or priority of the charge, and the


liquidator must make the document available to the person

entitled to it for the purpose of dealing with or realising the

charge over the secured property.

237.Documents held by receiver – (1) A receiver is not

required to deliver to a liquidator any documents that the

receiver requires for the purpose of exercising any powers or

functions as receiver in relation to property of a company in

liquidation.

(2) The liquidator may, by notice in writing, require the

receiver:

(a) to make any records and documents available for

inspection by the liquidator at any reasonable

time or times; and

(b) to provide the liquidator with copies of any records

and documents or extracts from them.

(3) The liquidator may take copies of any records and

documents made available for inspection or extracts from them.

(4) The liquidator must pay the reasonable expenses of the

receiver in complying with a requirement of the liquidator under

subsection (2).

Sub-division H – Meetings

238. Notice of first creditors’ meeting – (1) A liquidator

must give to any known creditor a notice in writing of a meeting

of creditors, and:

(a) if section 247(1) applies, the notice must be given

together with the report and notice referred to in

that paragraph; and

(b) if the liquidator receives a notice under section

244(1)(c) requiring a meeting of creditors to be

called, the notice must be given within 10

working days after receiving the notice.

(2) Not less than 5 working days before the creditors’

meeting, a liquidator must also give public notice of the

meeting.

239. Timing of first creditors’ meeting – (1) Except if

section 238(1)(b) applies, a meeting of creditors must be held:


(a) for a liquidator appointed under section 215 or 216,

within 10 working days of the liquidator’s

appointment; or

(b) for a liquidator appointed under section 218, within

30 working days of the liquidator's appointment;

or

(c) in either case, within a longer period as the Court

may allow.

(2) If section 238(1)(b) applies, a meeting of creditors must

be held within 15 working days after the liquidator receives a

notice under section 244(1)(c) requiring a meeting of creditors

to be called.

240. Purpose of first creditors’ meeting – (1) Subject to

sections 242 and 244, the liquidator of a company must call a

meeting of the creditors of the company for the purpose:

(a) for a liquidator appointed under section 215 or 216,

of resolving whether to confirm the appointment

of that liquidator or to appoint another liquidator

in place of the liquidator so appointed;

(b) for a liquidator appointed under section 218, of

resolving whether to confirm the appointment of

that liquidator or to make an application to the

Court for the appointment of a liquidator in place

of the liquidator so appointed:

(c) in either case, of determining whether to pass a

resolution for the purposes of section 246(1)(c).

(2) If the appointment of a liquidator under section 215 or

216 is not confirmed at a meeting of creditors and another

liquidator is not appointed in place of that liquidator, the

appointment of the liquidator under either of those sections

continues until another liquidator is appointed.

241.Replacement liquidator – (1) If at a meeting of

creditors it is resolved to appoint a person as liquidator of the

company in place of the liquidator appointed under sections 215

or 216, the person who it is resolved to appoint as liquidator is,

subject to section 213, appointed as the liquidator of the

company.


(2) If at a meeting of creditors it is resolved to apply to the

Court for the appointment of a person as liquidator in place of

the liquidator appointed under section 218:

(a) the liquidator of the company must immediately

apply to the Court for the appointment of that

person as liquidator; and

(b) the Court may, if it thinks fit, appoint that person as

the liquidator of the company.

242. Effect of directors’ resolving company able to pay

its debts – Nothing in sections 238 to 241 applies to the

liquidator of a company appointed under section 215 or 216 if,

within 20 working days before the appointment of the

liquidator, the directors of the company resolved that the

company would, on the appointment of a liquidator under either

of those sections, be able to pay its debts and a copy of the

resolution is delivered to the Registrar for registration.

243. Other creditors’ meetings – (1) Subject to section

244, the liquidator of a company who was not, by reason of

section 242(1), required to call a meeting of creditors of the

company must, immediately call a meeting of the creditors of

the company for the purpose specified in section 240(1)(a) or

(b) if the liquidator is satisfied that:

(a) the directors who voted in favour of a resolution

referred to in that subsection did not have

reasonable grounds to believe that the company

would, on the appointment of a liquidator under

section 215 or 216, be able to pay its debts; or

(b) the company is not able to pay its debts.

(2) Section 240 applies with the necessary modifications.

244. Liquidator may dispense with meetings of creditors

– (1) A liquidator is not required to call a meeting of creditors

under section 238 or 243, as the case may be, if:

(a) the liquidator considers that no such meeting should

be held, having regard to—

(i) the assets and liabilities of the company; and

(ii) the likely result of the liquidation of the

company; and

(iii) any other relevant matters; and


(b) the liquidator gives notice in writing to the creditors

stating—

(i) that the liquidator does not consider that a

meeting should be held; and

(ii) the reasons for the liquidator’s view; and

(iii) that no such meeting will be called unless a

creditor gives notice in writing to the

liquidator, within 10 working days after

receiving the notice, requesting a meeting

to be called and giving reasons why a

meeting should be called; and

(c) no notice requesting a meeting to be called is

received by the liquidator within that period or, if

a notice requesting a meeting to be called is

received within that period, the Court directs the

liquidator that, having regard to the reasons

given in the notice and the circumstances of the

company considered by the liquidator under

paragraph (a), it is not necessary for the

liquidator to call a meeting.

(2) Notice under subsection (1)(b) must be given to any

known creditor:

(a) if section 245(1) applies, together with the report

and notice referred to in that section; or

(b) if section 245(1) is not applicable, at the time the

liquidator would have been required to send the

report and notice referred to in that section if it

were applicable.

245. Meetings of creditors or shareholders – (1) At any

time in the course of the liquidation, the liquidator may, at the

request in writing of any creditor or shareholder or on the

liquidator’s own motion, call a meeting of creditors or

shareholders:

(a) to vote on a proposal that a liquidation committee

be appointed to act with the liquidator in

accordance with Schedule 16; and

(b) if it is so decided, to choose the members of the

committee.

(2) A liquidator may decline a request by a creditor or

shareholder to call a meeting on the ground that:


(a) the request is frivolous or vexatious; or

(b) the request was not made in good faith; or

(c) except if a creditor or shareholder agrees to meet

the costs, the costs of calling a meeting would be

out of all proportion to the value of the

company’s assets.

(3) The decision of a liquidator to decline the request may

be reviewed by the Court on the application of any creditor or

shareholder, as the case may be.

(4) Subject to subsections (2) and (3), a liquidator who

receives a request to call:

(a) a meeting of creditors must immediately call a

meeting under Schedule 12; or

(b) a meeting of shareholders, must immediately call a

meeting under the company’s rules, except the

liquidator has power to give notice of a meeting

of shareholders and to act as, or appoint, the

chairperson of the meeting.

(5) The sole shareholder of a company may present to the

liquidator a view on any matter that could have been decided at

a meeting of shareholders under this section, and that view

must, for all purposes, be treated as though it were a decision

taken at a meeting of shareholders.

246. Views of creditors and shareholders at meetings to

be considered – (1) The liquidator must consider the views of:

(a) creditors set out in a resolution passed at a meeting

convened under Division 1 at which a resolution

under section 187(1)(c) to appoint a liquidator is

passed;

(b) the shareholders by whom any special resolution

was passed at a meeting held for the purposes of

section 216 set out in a resolution passed at that

meeting;

(c) creditors set out in any resolution passed at a

meeting held for the purposes of section 240;

(d) creditors or shareholders set out in a resolution

passed at a meeting called in accordance with

subsection (2);

(e) any liquidation committee given in writing to the

liquidator.


(2) For the purposes of subsection (1), a liquidator:

(a) must summon meetings of shareholders at such

times as may be specified by any resolution of

shareholders passed at a meeting held for the

purposes of section 216;

(b) must summon meetings of creditors at any times

that may be specified by any resolution of

creditors passed at a meeting held for the

purposes of Division 1 or section 240;

(c) must summon a meeting of shareholders

immediately when required to do so by notice in

writing given by shareholders holding not less

than 10% of all shares issued by the company;

(d) must summon a meeting of creditors immediately

when required to do so by notice in writing given

by creditors to whom is owed not less than 10%

of the total amount owed to all creditors of the

company;

(e) may, at his or her discretion, summon a meeting of

shareholders or creditors of the company.

(3) A liquidator who calls a meeting of creditors or

shareholders must call a meeting:

(a) under the rules of the company, in the case of a

meeting of shareholders; or

(b) under Schedule 12, in the case of a meeting of

creditors.

(4) For the purposes of holding a meeting of shareholders

under subsection (3)(a) the liquidator is taken to have power

under the company’s rules to call a meeting of shareholders

despite anything in the company’s rules, and references in the

company’s rules to chairman or chairperson must be read as

references to the liquidator.

(5) Nothing in this section limits or prevents a liquidator

from exercising his or her discretion in carrying out his or her

functions and duties under this Act.

Sub-division I – Reports

247. First report – (1) A liquidator must, within the

applicable period:


(a) prepare a list of any known creditor of the

company; and

(b) prepare and send to any known creditor, any

shareholder, and the Registrar for registration—

(i) a report containing a statement of the

company’s affairs, proposals for

conducting the liquidation, and, if

practicable, the estimated date of its

completion; and

(ii) a notice explaining the right of a creditor or

shareholder to require the liquidator to

call a meeting of creditors or

shareholders (as the case may be) under

section 245.

(2) In subsection (1), “applicable period” means:

(a) for a liquidator appointed under section 215, 216 or

217, 5 working days after the liquidator’s

appointment; or

(b) for a liquidator appointed under section 218, 25

working days after the liquidator’s appointment;

or

(c) in either case, any longer period that the Court may

allow.

248. Six-monthly report – A liquidator must, within 2

months of the end of each period of 6 months following the date

of commencement of the liquidation, prepare and send to any

known creditor and any shareholder, and send or deliver to the

Registrar, a report:

(a) on the conduct of the liquidation during the

preceding 6 months; and

(b) of any further proposals that the liquidator has for

completing the liquidation.

249. Exemption from reporting requirements – (1) The

Court may, on the application of a liquidator and on any

conditions that the Court thinks fit:

(a) exempt the liquidator from compliance with section

247 or 248; or

(b) modify the application of those sections in relation

to the liquidator.


(2) The liquidator need not comply with section 247 or 248

if the liquidator is satisfied that the value of the assets of the

company available for distribution to unsecured creditors who

are not preferential creditors is not likely to exceed $0.20, or

any other prescribed sum, in any tala owed to those creditors.

(3) If subsection (2) applies, and the liquidator does not

intend to comply with section 247 or 248, the liquidator must

give notice to the Registrar that he or she does not intend to

comply with either of those sections.

Sub-division J – Creditors’ Claims

250. Preferential claims – (1) The liquidator must pay out

of the assets of the company the expenses, fees, and claims set

out in Part 3 of Schedule 18 to the extent and in the order of

priority specified in that schedule.

(2) Without limiting clause 19 of Schedule 18, assets in

subsection (1) does not include assets subject to a charge unless

the charge is surrendered or taken to be surrendered or

redeemed under Part 2 of that Schedule.

251. Claims of other creditors and distribution of

surplus assets – (1) After paying preferential claims in

accordance with section 250 and obtaining any certificate

required under section 40(2) of the National Provident Fund Act

1972, the liquidator must apply the assets of the company in

satisfaction of all other claims.

(2) The claims referred to in subsection (1) rank equally

among themselves and must be paid in full, unless the assets are

insufficient to meet them, in which case payment abates

rateably among all claims.

(3) If, before the commencement of a liquidation, a creditor

agrees to accept a lower priority in respect of a debt than that

which it would otherwise have under this section, nothing in

this section prevents the agreement from having effect

according to its terms.

(4) A person whose shares have been repurchased by the

company, or a person whose shares have been redeemed by the

company, but who has not received payment in full of the

repurchase price or redemption price (as the case may be) is

taken to have agreed to subordinate his or her claim for any


unpaid balance of the repurchase price or redemption price (as

the case may be) to the rights of other creditors of the company.

(5) Subject to clause 41 of Schedule 18, after paying the

claims referred to in subsections (1) and (3), the liquidator must

distribute the company’s surplus assets:

(a) under the company’s rules; or

(b) if the company’s rules do not provide for the

distribution of surplus assets, in accordance with

section 23(1)(c) and any preferential rights as to

distributions of capital attached to shares issued

by the company under section 23(3)(d).

Sub-division K – End of Liquidation

252. Completion of liquidation – The liquidation of a

company is completed when the liquidator:

(a) complies with section 253(2); or

(b) delivers to the Registrar for registration—

(i) a copy of any order made by the Court

under section 253(3)(a); or

(ii) a copy of any order made by the Court

under section 253(3)(b) together with any

documents required to comply with the

order.

253.Final report and accounts – (1) As soon as practicable

after completing his or her duties in relation to the liquidation,

the liquidator of a company must prepare and send to any

creditor whose claim has been admitted and any shareholder:

(a) the final report and statement of realisation and

distribution in respect of the liquidation; and

(b) a statement that—

(i) all known assets have been dis-claimed, or

realised, or distributed without

realisation; and

(ii) all proceeds of realisation have been

distributed; and

(iii) the company is ready to be removed from

the Samoa register; and

(c) a summary of the applicable grounds on which the

creditor or shareholder may object to the removal


of the company from the register of companies

under section 263.

(2) As soon as practicable after completing his or her duties

in relation to the liquidation, the liquidator of a company must

send or deliver copies of the documents referred to in

subsection (1) to the Registrar for registration.

(3) The Court may, on the application of a liquidator and on

any conditions that the Court thinks fit:

(a) exempt the liquidator from compliance with

subsection (1) or (2); or

(b) modify the application of those provisions in

relation to the liquidator.

254. Liquidation surplus account – (1) Money

representing unclaimed assets of a company standing to the

credit of a liquidator must, after completion of the liquidation,

be paid to the Public Trustee.

(2) At the expiration of a period of 12 months after the date

on which the money is paid, the Public Trustee must, after

deduction of any amount required to meet the claim of any

person that is established within that period, pay the balance

into an account entitled the “Liquidation Surplus Account” for

distribution under this section.

(3) Money held in the Liquidation Surplus Account may be

invested under the Trustee Act 1975 as to the investment of

trust funds. Interest on any investment must be distributed

under this section.

(4) Money held in the Liquidation Surplus Account may be:

(a) paid or distributed to any person entitled to

payment or distribution in the liquidation of a

company any money representing the surplus

assets of which has been credited to the

Liquidation Surplus Account; or

(b) paid, subject to such conditions as the Official

Assignee for Samoa may impose, in meeting the

claims of the creditors of a company in the

liquidation of which the Official Assignee or any

other person is the liquidator, for payment of the

costs of proceedings in the liquidation after the

commencement of the liquidation, legal or other

expert advice, or the costs of any expert witness,


if the Official Assignee for Samoa is satisfied

that it is fair and reasonable for those costs to be

met out of the Liquidation Surplus Account.

(5) Payments from the Liquidation Surplus Account must be

made by the Public Trustee at the direction of the Official

Assignee for Samoa.

(6) In making a payment under this section, the Public

Trustee is not required to ascertain that money or sufficient

money was received on account of any company to which the

claim for payment relates.

(7) Nothing in Part 10 (Unclaimed Money) of the Public

Finance Management Act 2001 applies in relation to money to

which this section applies.

255. Termination of liquidation by Court – (1) The Court

may, at any time after the appointment of a liquidator of a


make an order terminating the liquidation of the company.

(2) An application may be made by:

(a) the liquidator of the company; or



(d) a creditor of the company ;or

(e) an administrator of the company under

administration or acting under a compromise

approved by a resolution of creditors under

section 187(1)(a); or

(f) the Registrar.

(3) The Court may require the liquidator of the company to

give a report to the Court with respect to any facts or matters

relevant to the application.

(4) The Court may, on, or at any time after, making an

order, make any other order that it thinks fit in connection with

the termination of the liquidation.

256. Effect of Court order under section 255 – (1) If the

Court makes an order under section 255(1), the company ceases

to be in liquidation and the liquidator ceases to hold office with

effect on and from the making of the order or any other date

specified in the order.


257. Notice of termination of liquidation – (1) The person

who applied for a Court order terminating the liquidation or the

liquidator, in the case of the creditors terminating the

liquidation, must, within 10 working days after the order was

made, or the resolution was passed, (as the case may be),

deliver a notice of the order, or the passing of the resolution, to

the Registrar for registration.




258. Effect of compromise on termination of liquidation

– Unless the Court orders under section 255(1), a company does

not cease to be in liquidation and the liquidator continues to

hold office subject to the terms of a compromise if:

(a) the liquidator has appointed an administrator of the

company; and

(b) a compromise that binds the company and its

creditors, or a class of creditors, has been

approved by a resolution of creditors under

section 187(1)(a).

PART 10

REMOVAL OF COMPANIES FROM REGISTER


259. Removal from register – A company is removed

from the Samoa register when a notice signed by the Registrar

stating that the company is removed from the Samoa register is

registered under this Act.

260. Grounds for removal from register – Subject to

section 262, the Registrar must remove a company from the

Samoa register if:

(a) the Registrar is satisfied that—

(i) the company has ceased to carry on

business; and

(ii) there is no other reason for the company to

continue in existence; or


(b) the company has been put into liquidation, and—

(i) no liquidator is acting; or

(ii) the prescribed documents confirming that

the liquidation of the company has been

completed have not been sent or

delivered to the Registrar within 6

months after the completion of the

liquidation; or

(c) there is sent or delivered to the Registrar a request

that the company be removed from the Samoa

register on either of the grounds specified in

section 261(1) made by—

(i) a shareholder or any other person authorised

to make the request by a special

resolution of shareholders entitled to vote

and voting on the question; or

(ii) a director or any other person, if the rules of

the company so require or permit; or

(d) a liquidator sends or delivers to the Registrar the

prescribed documents confirming that the

liquidation of the company has been completed.

261.Request for company to be removed from register –

(1) A request that a company be removed from the Samoa

register under section 260(c) may be made on the grounds that

the company:

(a) has ceased to carry on business, has discharged in

full its liabilities to all its known creditors, and

has distributed its surplus assets under its rules

and this Act; or

(b) has no surplus assets after paying its debts in full or

in part, and no creditor has applied to the Court

for an order putting the company into

liquidation.

(2) A request that a company be removed from the Samoa

register under section 260(c) must be accompanied by a written

notice from the Commissioner of Inland Revenue stating that

the Commissioner has no objection to the company being

removed from the Samoa register.


262.Requirements to be met before company must be

removed from register – (1) The Registrar must remove a

company from the Samoa register under section 260(a) only if:

(a) the Registrar has complied with sections 263 and

264; and

(b) the company has not satisfied the Registrar that it is

carrying on business or that reason exists for the

company to continue in existence; and

(c) the Registrar—

(i) is satisfied that no person has objected to the

removal under section 266; or

(ii) if an objection to the removal has been

received, has complied with section 267.

(2) The Registrar must remove a company from the Samoa

register under section 260(b), (c), or (d) only if:

(a) the Registrar is satisfied that notice has been given

in accordance with section 265; and

(b) the Registrar—

(i) is satisfied that no person has objected to the

removal under section 266; or

(ii) if an objection to the removal has been

received, has complied with section 267.

Division 2 – Notices

263. Notice of intention to remove company that has

ceased to carry on business – Before a company can be

removed from the Samoa register under section 260(a), the

Registrar must:

(a) give notice to the company under section 264(1);

and

(b) give notice of the matters set out in section 264(2)

to any person who is entitled to a registered

charge in respect of property of the company;

and

(c) give public notice of the matters set out in section

264(2).

264. Contents of notice – (1) The notice to be given under

section 263(a) must:


(a) state the section under, and the grounds on which, it

is intended to remove the company from the

Samoa register; and

(b) state that the company will be removed from the

Samoa register, unless—

(i) by the date specified in the notice, which

must not be less than 20 working days

after the date of the notice, the company

satisfies the Registrar by notice in writing

that it is still carrying on business or there

is other reason for it to continue in

existence; or

(ii) the Registrar does not, in accordance with

section 267, proceed to remove the

company from the register.

(2) The notice to be given under section 263(b) and (c) must

specify:

(a) the name of the company; and

(b) the section under which, and the grounds on which,

it is intended to remove the company from the

Samoa register; and

(c) the date by which an objection to the removal must

be delivered to the Registrar, which must not be

less than 20 working days after the date of the

notice.

265. Notice of intention to remove in other cases – (1) If a

company is to be removed from the register under section

260(b), the Registrar must give public notice of the matters set

out in subsection (4).

(2) If a company is to be removed from the register under

section 260(c) or (d), the applicant, or the liquidator, as the case

may be, must give public notice of the matters set out in

subsection (4).

(3) If a company is to be removed from the register under

section 260(b), the Registrar, or, if it is to be removed from the

register under section 260(c), the applicant, as the case may be,

must also give notice of the matters set out in subsection (4) to:

(a) the company; and

(b) a person who is entitled to a registered charge in

respect of property of the company.


(4) The notice to be given under this section must specify:


(b) the section under which, and the grounds on which,

it is intended to remove the company from the

Samoa register; and

(c) the date by which an objection to the removal under

section 266 must be delivered to the Registrar,

which must be not less than 20 working days

after the date of the notice.

Division 3 – Objection

266. Objection to removal from Samoa register – (1) If a

notice is given of an intention to remove a company from the

Samoa register, any person may deliver to the Registrar, not

later than the date specified in the notice, an objection to the

removal on any 1 or more of the following grounds:

(a) that the company is still carrying on business or

there is other reason for it to continue in

existence;

(b) that the company is a party to legal proceedings;

(c) that the company is in receivership, or liquidation,

or both;

(d) that the person is a creditor, or a shareholder, or a

person who has an un-discharged claim against

the company;

(e) that the person believes that there exists, and

intends to pursue, a right of action on behalf of

the company under Part 6;

(f) that, for any other reason, it would not be just and

equitable to remove the company from the

Samoa register.

(2) For the purposes of subsection (1)(d):

(a) a claim by a creditor against a company is not an

un-discharged claim if—

(i) the claim has been paid in full; or

(ii) the claim has been paid in part under a

compromise entered into under Division

2 of Part 9 or by being otherwise

compounded to the reasonable

satisfaction of the creditor; or


(iii) the claim has been paid in full or in part by a

receiver or a liquidator in the course of a

completed receivership or liquidation; or

(iv) a receiver or a liquidator has notified the

creditor that the assets of the company

are not sufficient to enable any payment

to be made to the creditor; and

(b) a claim by a shareholder or any other person against

a company is not an un-discharged claim if—

(i) payment has been made to the shareholder

or that person in accordance with a right

under the company’s rules to receive or

share in the company’s surplus assets; or

(ii) a receiver or liquidator has notified the

shareholder or that person that the

company has no surplus assets.

267.Duties of Registrar if objection received – (1) If an

objection to the removal of a company from the Samoa register

is made on a ground specified in section 266(1)(a), (b), or (c),

the Registrar must not proceed with the removal unless the

Registrar is satisfied that:

(a) the objection has been withdrawn; or

(b) any facts on which the objection is based are not, or

are no longer, correct; or

(c) the objection is frivolous or vexatious.

(2) If an objection to the removal of a company from the

Samoa register is made on a ground specified in section

266(1)(d), (e), or (f), the Registrar must give notice to the

person objecting that the Registrar intends to proceed with the

removal, unless notice of an application to the Court by that

person for an order:

(a) that the company be put into liquidation; or

(b) under section 268, that, on any ground specified in

section 266, the company not be removed from

the Samoa register, is served on the Registrar not

later than 20 working days after the date of the

notice.

(3) The Registrar must proceed with the removal if:

(a) notice of such an application to the Court is not

served on the Registrar; or


(b) the application is withdrawn; or

(c) on the hearing of such an application, the Court

refuses to grant either an order putting the

company into liquidation or an order that the

company not be removed from the Samoa

register.

(4) A person who makes such an application must give the

Registrar notice in writing of the decision of the Court within 5

working days of the decision being given.

(5) The Registrar must send to a person who sent or

delivered to the Registrar a request that the company be

removed from the Samoa register under section 260(c) or, while

acting as liquidator, sent or delivered to the Registrar the

documents referred to in section 260(d):

(a) a copy of an objection under section 266; and

(b) a copy of a notice given by or served on the

Registrar under this section; and

(c) if the company is removed from the Samoa register,

notice of the removal.

268. Powers of Court – (1) A person who gives a notice

objecting to the removal of a company from the Samoa register

on a ground specified in section 266(1)(d), (e), or (f) may apply

to the Court for an order that the company not be removed from

the register on any ground set out in that subsection.

(2) On an application for an order under subsection (1), the

Court may make an order that the company is not to be removed

from the register if the Court is satisfied that the company

should not be removed from the register on any of those

grounds.

Division 4 – Effect of Removal from Register

269.Property of company removed from register – (1)

Property that, immediately before the removal of a company

from the Samoa register, had not been distributed or disclaimed,

vests in the State with effect from the removal of the company

from the register.

(2) For the purposes of this section, property of the former

company:


(a) includes leasehold property and all other rights

vested in or held on trust for the former

company; but

(b) does not include property held by the former

company on trust for any other person.

(3) The Financial Secretary must, immediately on becoming

aware of the vesting of the property, give public notice of the

vesting, setting out the name of the former company and details

of the property.

(4) If property is vested in the State under this section, a

person who would have been entitled to receive all or part of the

property, or payment from the proceeds of its realisation, if it

had been in the hands of the company immediately before the

removal of the company from the Samoa register, or any other

person claiming through that person, may apply to the Court for

an order:

(a) vesting all or part of the property in that person; or

(b) for payment to that person by the State of

compensation of an amount not greater than the

value of the property.

(5) On an application made under subsection (4), the Court

may:

(a) decide any question concerning the value of the

property, the entitlement of any applicant to the

property or to compensation, and the

apportionment of the property or compensation

among 2 or more applicants; or

(b) order that the hearing of 2 or more applications be

consolidated; or

(c) order that an application be treated as an application

on behalf of all persons, or all members of a

class of persons, with an interest in the property;

or

(d) make an ancillary order.

(6) Compensation ordered to be paid under subsection (4)

must be paid out of the Treasury Fund without further

appropriation than this section.

270. Disclaimer of property by the State – (1) The

Financial Secretary may, by notice in writing, disclaim the


State’s title to property vesting in the State if the property is

onerous property.

(2) The Financial Secretary must immediately give public

notice of the disclaimer.

(3) Property that is disclaimed under this section is taken not

to have vested in the State.

(4) Subject to any order of the Court, the Financial Secretary

is not entitled to disclaim property unless whichever of the

following occurs first:

(a) the property is disclaimed within 12 months after

the vesting of the property in the State first

comes to the notice of the Secretary:

(b) if any person gives notice in writing to the

Secretary requiring the Secretary to elect, before

the close of such date as is stated in the notice,

not being a date that is less than 60 working days

after the date on which the notice is received by

the Secretary, whether to disclaim the property,

the property is disclaimed before the close of that

date.

(5) A statement in a notice disclaiming property under this

section that the vesting of the property in the State first came to

the notice of the Financial Secretary on a specified date is, in

the absence of proof to the contrary, evidence of the fact stated.

(6) In this section, “onerous property” means:

(a) an unprofitable contract; or

(b) property of the company that is un-saleable, or not

readily saleable, or which may give rise to a

liability to pay money or perform an onerous act.

271. Effect of disclaimer – (1) A disclaimer under section

270:

(a) brings to an end on and from the date of the

disclaimer the rights, interests, and liabilities of

the State in relation to the property disclaimed;

(b) does not, except so far as necessary to release the

State from a liability, affect the rights or

liabilities of any other person.

(2) A person suffering loss or damage as a result of a

disclaimer under section 270 may:


(a) claim as a creditor of the company for the amount

of the loss or damage, taking account of the

effect of any order made by the Court under

paragraph (b);

(b) apply to the Court for an order that the disclaimed

property be delivered to or vested in that person.

(3) The Court may make an order under subsection (2)(b) if

it is satisfied that it is just that the property should be vested in

the applicant.

272. Liability of directors, shareholders, and others to

continue – The removal of a company from the Samoa register

does not affect the liability of any former director or

shareholder of the company or any other person in respect of

any act or omission that took place before the company was

removed from the register and that liability continues and may

be enforced as if the company had not been removed from the

register.

273. Liquidation of company removed from Samoa

register – (1) Despite the fact that a company has been removed

from the Samoa register, the Court may appoint a liquidator of

the company as if the company continued in existence.

(2) If a liquidator is appointed under subsection (1):

(a) Division 3 of Part 9 applies, with the necessary

modifications, to the liquidation;

(b) section 280 applies, with the necessary

modifications, to property of the company that is

vested in the State as if the company had been

restored to the Samoa register.

Division 5 – Restoration of Removed Company to Samoa

Register

274.Registrar may restore company to Samoa register –

(1) Subject to sections 275 and 276, the Registrar must, on the

application of a person referred to in subsection (2), and may,

on his or her own motion, restore a company that has been

removed from the Samoa register to the register if he or she is

satisfied that, at the time the company was removed from the

register:


(a) the company was still carrying on business or other

reason existed for the company to continue in

existence; or

(b) the company was a party to legal proceedings; or

(c) the company was in receivership, or liquidation, or

administration.

(2) A person may apply under subsection (1) if the person

was, at the time the company was removed from the Samoa

register:

(a) a shareholder or director of the company; or

(b) a creditor of the company; or

(c) an administrator, a liquidator, or a receiver of the

property, of the company.

(3) Nothing in this section or sections 275 to 277 limits or

affects section 278.

275. Requirements to be met before restoring company

to Samoa register – (1) Before the Registrar restores a

company to the Samoa register:

(a) for a company that was removed from the Samoa

register under section 260(a) or (b), the Registrar

must give public notice setting out—


(ii) the name and address of the applicant; and

(iii) the section under, and the grounds on which,

the application is made or the Registrar

proposes to act, as the case may be; and

(iv) the date by which an objection to restoring

the company to the register must be

delivered to the Registrar, not being less

than 20 working days after the date of the

notice;

(b) for a company that was removed from the Samoa

register under section 260(c) or (d), the person

who made the application under section 274(1)

must give public notice setting out—


(ii) the person’s name and address; and

(iii) the section under which, and the grounds on

which, the application is made; and


(iv) the date by which an objection to restoring

the company to the register must be

delivered to the Registrar, not being less

than 20 working days after the date of the

notice.

(2) Before the Registrar restores a company to the Samoa

register, the Registrar may require any of the provisions of this

Act or any other Act or any regulations made under this Act or

any other Act, being provisions with which the company had

failed to comply before it was removed from the register, to be

complied with.

276. Registrar not to restore company to Samoa register

if objection received – The Registrar must not restore a

company to the Samoa register if the Registrar receives an

objection to the restoration within the period stated in the

notice.

277. Court directions – The Court may, on the application

of the Registrar or the applicant, give any directions or make

any orders that may be necessary or desirable for the purpose of

placing a company that is restored to the Samoa register under

section 274 and any other persons as nearly as possible in the

same position as if the company had not been removed from the

register.

278.Court may restore company to Samoa register – (1)

The Court may, on the application of a person referred to in

subsection (2), order that a company that has been removed

from the Samoa register be restored to the register if it is

satisfied that:

(a) at the time the company was removed from the

register—

(i) the company was still carrying on business

or other reason existed for the company

to continue in existence; or

(ii) the company was a party to legal

proceedings; or

(iii) the company was in receivership, or

liquidation, or administration; or


(iv) the applicant was a creditor, or a

shareholder, or a person who had an un-

discharged claim against the company; or

(v) the applicant believed that a right of action

existed, or intended to pursue a right of

action, on behalf of the company under

Part 6; or

(b) for any other reason it is just and equitable to

restore the company to the Samoa register.

(2) The following persons may make an application under

subsection (1):

(a) any person who, at the time the company was

removed from the Samoa register—

(i) was a shareholder or director of the

company; or

(ii) was a creditor of the company; or

(iii) was a party to any legal proceedings against

the company; or

(iv) had an un-discharged claim against the

company; or

(v) was the administrator, or liquidator, or a

receiver of the property of, the company:

(b) the Registrar;

(c) with the leave of the Court, any other person.

(3) Before the Court makes an order restoring a company to

the Samoa register under this section, it may require any

provisions of this Act or any other Act or any regulations made

under this Act or any other Act, being provisions with which the

company had failed to comply before it was removed from the

register, to be complied with.

(4) The Court may give any directions or make any orders

that may be necessary or desirable for the purpose of placing the

company and any other persons as nearly as possible in the

same position as if the company had not been removed from the

Samoa register.

279. Restoration to register – (1) A company is restored to

the Samoa register when a notice signed by the Registrar stating

that the company is restored to the Samoa register is registered

under this Act.


(2) A company that is restored to the Samoa register is taken

to have continued in existence as if it had not been removed

from the register.

280. Vesting of property in company on restoration to

register – (1) Subject to this section, property of a company

that is, at the time the company is restored to the Samoa

register, vested in the State pursuant to section 269, vests in the

company on its restoration to the Samoa register as if the

company had not been removed from the register.

(2) Nothing in subsection (1) applies to any property vested

in the State under section 269 if the Court has made an order for

the payment of compensation to any person under section

269(4)(b) in respect of that property.

(3) Nothing in subsection (1) applies to land or any estate or

interest in land that has vested in the State if transmission to the

State of the land or that estate or interest in land has been

registered under the Land Titles Registration Act 2008.

(4) If transmission to the State of land or any estate or

interest in land that has vested in the State under section 269 has

been registered under the Land Titles Registration Act 2008, the

Court may, on the application of the company, make an order:

(a) for the transfer of the land or the estate or interest to

the company; or

(b) for the payment by the State to the company of

compensation—

(i) of an amount not greater than the value of

the land or the estate or interest as at the

date of registration of the transmission; or

(ii) if the land or the estate or interest has been

sold or contracted to be sold, of an

amount equal to the net amount received

or receivable from the sale.

(5) On an application under subsection (4), the Court may

decide any question concerning the value of the land or the

estate or interest.

(6) Compensation ordered to be paid under subsection (4)

must be paid out of the Treasury Fund without further

appropriation than this section.

PART 11


OVERSEAS COMPANIES

281. Meaning of carrying on business – For the purposes

of this Part:

(a) a reference to an overseas company carrying on

business in Samoa includes a reference to the

overseas company—

(i) establishing or using a share transfer office

or a share registration office in Samoa; or

(ii) administering, managing, or dealing with

property in Samoa as an agent, or

personal representative, or trustee, and

whether through its employees or an

agent or in any other manner:

(b) an overseas company does not carry on business in

Samoa merely because in Samoa the company—

(i) is or becomes a party to a legal proceeding

or settles a legal proceeding or a claim or

dispute; or

(ii) holds meetings of its directors or

shareholders or carries on other activities

concerning its internal affairs; or

(iii) maintains a bank account; or

(iv) effects a sale of property through an

independent contractor; or

(v) solicits or procures an order that becomes a

binding contract only if the order is

accepted outside Samoa; or

(vi) creates evidence of a debt or creates a

charge on property; or

(vii) secures or collects any of its debts or

enforces its rights in relation to securities

relating to those debts; or

(viii) conducts an isolated transaction that is

completed within a period of 30 working

days, not being one of a number of

similar transactions repeated; or

(ix) invests its funds or holds property.

282. Name must comply with section 10 – (1) An overseas

company must not carry on business in Samoa on or after the


commencement of this Act under a name that could not be

registered under section 10.

(2) Subsection (1) does not apply to an overseas company

that, immediately before the commencement of this Act, is

registered under Part XII of the Companies Act 1955.

(3) If an overseas company contravenes this section:



units; and




283. Overseas companies to register under this Act – (1)

An overseas company that, on or after the commencement of

this Act, commences to carry on business in Samoa must apply

for registration under this Part in accordance with section 285

within 10 working days of commencing to carry on business.

(2) Subject to subsection (3) an overseas company that,

immediately before the commencement of this Act, was

carrying on business in Samoa and, on the commencement of

this Act, continues to carry on business in Samoa, must apply

for registration under this Part in accordance with section 285

within 10 working days of the commencement of this Act.

(3) An overseas company registered under Part XII of the

Companies Act 1955 immediately before the date of

commencement of this Act is, on and from that date, taken to be

registered under this Part instead of under Part XII of the

Companies Act 1955.

(4) An overseas company that is taken to be registered under

this Part by virtue of subsection (3) must, within 20 working

days of the commencement of this Act, deliver to the Registrar

for registration, a notice in the prescribed form stating:

(a) the full address of the principal place of business in

Samoa of the overseas company; and

(b) the postal address in Samoa of the overseas

company; and

(c) the full name of 1 or more persons resident or

incorporated in Samoa who are authorised to

accept service in Samoa of documents on behalf

of the overseas company, and the postal address


and residential or business address of each of

those persons.

(5) An overseas company that changes its name must send

or deliver to the Registrar a notice in the prescribed form of the

change of name within 10 working days of the change of name.

(6) If an overseas company fails to comply with this section:

(a) the overseas company commits an offence and is

liable on conviction to a fine not exceeding 50

penalty units; and

(b) every director of the overseas company commits an

offence and is liable on conviction to a fine not


284. Validity of transactions not affected – A failure by

an overseas company to comply with section 282 or 283 does

not affect the validity or enforceability of any transaction

entered into by the overseas company.

285. Application for registration – (1) An application for

registration of an overseas company under this Part must be

delivered to the Registrar and must be:

(a) in the prescribed form; and

(b) signed by or on behalf of the overseas company.

(2) Without limiting subsection (1), the application must:

(a) state the name of the overseas company; and

(b) state the full names and residential addresses and

postal addresses of the directors of the overseas

company at the date of the application; and

(c) state the full address of the place of business in

Samoa of the overseas company or, if the

overseas company has more than 1 place of

business in Samoa, the full address of the

principal place of business in Samoa of the

overseas company; and

(d) state the postal address in Samoa of the overseas

company; and

(e) have attached evidence of incorporation of the

overseas company, and, if not in English, a

certified translation of that document; and

(f) state the full name of 1 or more persons resident or

incorporated in Samoa who are authorised to


accept service in Samoa of documents on behalf

of the overseas company, and the postal address

and residential or business address of each those

persons.

286. Registration of overseas company – (1) If the

Registrar receives a properly completed application for

registration under this Part of an overseas company, the

Registrar must immediately register the overseas company on

the overseas register.

(2) If an overseas company is taken to be registered under

this Part, the Registrar must, immediately after the

commencement of this Act, transfer the registration of the

overseas company to the overseas register.

(3) If the Registrar receives a notice of a change of name of

an overseas company under section 283(5), the Registrar must

register the change of name on the overseas register.

287.Use of name by overseas company – (1) An overseas

company that carries on business in Samoa must ensure that its

full name, and the name of the country where it was

incorporated, are clearly stated in:

(a) written communications sent by, or on behalf of,

the company; and

(b) documents issued or signed by, or on behalf of, the

company that evidence or create a legal

obligation of the company.

(2) For the purposes of subsection (1), a generally

recognised abbreviation of a word or words may be used in the

name of an overseas company if it is not misleading to do so.

288. Further information to be provided by overseas

company – (1) An overseas company that carries on business in

Samoa must ensure that, within 20 working days of the change,

notice in the prescribed form is given to the Registrar of:

(a) a change in the directors or in the names or

residential addresses or postal addresses of the

directors of the overseas company; or

(b) a change in the address of the place of business or

principal place of business of the overseas

company; or


(c) a change in the postal address in Samoa of the


(d) a change in any person or in the postal address or

residential or business address of any person

authorised to accept service in Samoa of

documents on behalf of the overseas company.

(2) An overseas company must, within 20 working days of

being required to do so by the Registrar, deliver to the

Registrar:

(a) a certified copy of the document constituting or

defining its constitution; or

(b) a certified copy of any alterations to that document

since a copy of the document was last provided

to the Registrar; and

(c) if the relevant documents are not in English, a

certified translation of those documents. The

Registrar must require delivery of the relevant

documents by the overseas company under this

subsection if requested to do so by any creditor

of that overseas company in Samoa, unless the

Registrar considers that the request is frivolous

or vexatious.

(3) If an overseas company fails to comply with subsection

(1) or (2):

(a) the overseas company commits an offence and is

liable on conviction to a fine not exceeding 50

penalty units; and




289. Annual return of overseas company – (1) An

overseas company that carries on business in Samoa must

ensure that the Registrar receives each year, during the month

allocated to the overseas company for the purposes of this

section, an annual return in the prescribed form confirming that

the information on the overseas register in respect of the

overseas company referred to in the return is correct at the date

of the return.


(2) The annual return must be dated as at a day within the

month during which the return is required to be received by the

Registrar.

(3) On registration of an overseas company under this Part,

the Registrar must allocate a month to the company for the

purposes of this section.

(4) The Registrar may, by written notice to an overseas

company, alter the month allocated to the company under

subsection (3).

(5) Despite subsection (1), an overseas company that is

taken to be registered under this Part need not make an annual

return in the calendar year of its registration under this Part.

(6) If an overseas company fails to comply with subsection

(1) or (2):



units; and




290. Overseas company ceasing to carry on business in

Samoa – (1) An overseas company registered under this Part

that intends to cease to carry on business in Samoa must:

(a) give public notice of that intention; and

(b) give notice to the Registrar in the prescribed form

stating the date on which it will cease to carry on

business in Samoa.

(2) The Registrar must remove an overseas company from

the overseas register as soon as practicable after:

(a) the date specified in the notice given in accordance

with subsection (1)(b); or

(b) receipt of a written notice given by a liquidator that

the liquidation of the assets in Samoa of the

overseas company has been completed.

291.Attorneys of overseas companies – (1) Part 12 of the

Property Law Act 1952 applies, with the necessary

modifications, to a power of attorney executed by an overseas

company registered under this Part to the same extent as if the

company were a person and as if the commencement of the


liquidation of the company was the death of a person within the

meaning of Part 12 of that Act.

(2) A declaration endorsed on or annexed to a document

appointing, or appearing to appoint, an attorney of an overseas

company, made or appearing to be made by one of the directors

before a person authorised by section 22 of the Oaths,

Affidavits and Declarations Act 1963 to take a declaration for

use in Samoa, in the country concerned, to the effect that:

(a) the company is incorporated under the name stated

in the document in accordance with the law of

the country in which it is so incorporated, the

name of which is stated in the declaration; and

(b) the document has been executed, and the powers

appearing to be conferred on the attorney are

authorised to be conferred under the constitution

of the company, or under the Act or document

under which the company is incorporated, or by

any other document constituting or defining the

constitution of the company; and

(c) the person making the declaration is a director of

the company, is conclusive evidence of those

facts.

292. Liquidation of assets in Samoa – (1) An application

may be made to the Court for the liquidation of the assets in

Samoa of an overseas company in accordance with Division 3

of Part 9, subject to the modifications and exclusions set out in

Schedule 19.

(2) An application may be made under subsection (1)

whether or not the overseas company:

(a) is registered under this Part; or

(b) has given public notice of an intention to cease to

carry on business in Samoa; or

(c) has given notice to the Registrar of the date on

which it will cease to carry on business in

Samoa; or

(d) has been dissolved, or otherwise ceased to exist as a

company, under or by virtue of the laws of any

other country.

PART 12


TRANSFER OF REGISTRATION

293. Overseas companies may be registered as

companies under this Act – Subject to this Part, an overseas

company may be registered as a company under this Act.

294. Application for registration – (1) An application by

an overseas company to register as a company under this Act

must be in the prescribed form and must be accompanied by:

(a) a certified copy of its certificate of incorporation or

other similar document that evidences its in-

corporation; and

(b) a certified copy of its rules or other similar

document; and

(c) evidence acceptable to the Registrar that the

company is not prevented from being registered

as a company under this Act by either section

295 or 296; and

(d) the documents and information that are required to

register a company under this Act; and

(e) any other documents and information the Registrar

may require.

(2) The Registrar may direct that a document that has been

delivered to the Registrar or registered under Part 11 need not

accompany the application.

295. Overseas companies must be authorised to register

– An overseas company must not be registered as a company

under this Act unless:

(a) the company is authorised to transfer its

incorporation under the law of the country in

which it is incorporated; and

(b) the company has complied with the requirements of

that law in relation to the transfer of its

incorporation; and

(c) if that law does not require its shareholders, or a

specified proportion of them, to consent to the

transfer of its incorporation, the transfer has been

consented to by not less than 75% of its

shareholders entitled to vote an voting in person

or proxy at a meeting of which not less than 15


working days’ notice is given specifying the

intention to transfer the company’s

incorporation.

296. Overseas companies that cannot be registered – An

overseas company must not be registered as a company under

this Act if:

(a) the company is in liquidation; or

(b) a receiver or manager has been appointed, whether

by a court or not, in relation to the property of

the company; or

(c) the company has entered into a compromise or

arrangement with a creditor that is in force; or

(d) an application has been made to a court and has not

been dealt with, whether in Samoa or in another

country—

(i) to put the company into liquidation or wind

it up; or

(ii) for the approval of a compromise or

arrangement between the company and a

creditor.

297.Registration – (1) As soon as the Registrar receives a

properly completed application for registration of an overseas

company as a company under this Act, the Registrar must:


(b) issue a certificate of registration in the prescribed

form.

(2) A certificate of registration of a company issued under

this section is conclusive evidence that:

(a) all the requirements as to registration have been

complied with; and

(b) on and from the date of registration stated in the

certificate, the company is registered under this

Act.

(3) If an application for registration of an overseas company

as a company under this Act specifies a date on which the

registration is intended to become effective, and that date is the

same as, or later than, the date on which the Registrar receives

the documents, the certificate of registration must be expressed

to have effect on the date specified in the application.


298.Effect of registration – (1) The registration of an

overseas company under this Act does not:

(a) create a new legal entity; or

(b) prejudice or affect the identity of the body

corporate constituted by the company or its

continuity as a legal entity; or

(c) affect the property, rights or obligations of the

company; or

(d) affect proceedings by or against the company.

(2) Proceedings that could have been commenced or

continued by or against the overseas company before

registration under this Act may be commenced or continued by

or against the company after registration.

299. Companies may transfer incorporation – Subject to

this Part, a company may be removed from the Samoa register

in connection with becoming incorporated under the law in

force in, or in any part of, another country.

300. Application to transfer incorporation – An

application by a company for removal from the Samoa register

in connection with becoming incorporated under the law in

force in, or in any part of, another country must be in the

prescribed form and must be accompanied by:

(a) evidence acceptable to the Registrar that sections

301 and 302 have been complied with; and

(b) evidence acceptable to the Registrar that the

removal of the company from the Samoa register

is not prevented by section 303; and

(c) written notice from the Commissioner of Inland

Revenue that the Commissioner has no objection

to the company being removed from the Samoa

register; and

(d) evidence acceptable to the Registrar that the

company is incorporated under that law, or will

be incorporated under that law no later than the

date on which it is to be removed from the

Samoa register; and

(e) any other documents or information that the

Registrar may require.


301. Approval of shareholders – A company must not

apply to be removed from the Samoa register under section 300

unless the making of the application has been approved by

special resolution.

302. Company to give public notice – (1) A company must

not apply to be removed from the Samoa register under section

300 unless:

(a) the company gives public notice—

(i) stating that it intends, after the date

specified in the notice, which must not be

less than 20 working days after the date

of the notice, to apply under section 300

for the company to be removed from the

Samoa register in connection with the

company becoming incorporated under

the law in force in, or in any part of,

another country; and

(ii) specifying the country or part of the country

under the law of that it is proposed that

the company will become incorporated;

and

(b) the application is made after that date.

(2) If the Court is satisfied that the proposed removal of a

company from the Samoa register under this Part would unfairly

prejudice a shareholder or creditor of the company or a person

to whom the company is under an obligation, it may, on the

application of that person made at any time before the date on

which the removal becomes effective, make any of the

following orders:

(a) an order restraining the removal of the company

from the Samoa register under this Part;

(b) an order specifying conditions that must be met by

the company before being removed from the

Samoa register under this Part;

(c) if an order is made under paragraph (a) or (b),

orders granting any consequential or ancillary

relief that the court thinks fit.


303.Companies that cannot transfer incorporation – A

company must not be removed from the Samoa register under

section 304 if:

(a) the company is in administration or liquidation, or

an application has been made to the Court to put

the company into liquidation; or

(b) a receiver or manager has been appointed, whether

by the Court or not, in relation to any property of

the company; or

(c) a compromise has been approved by the Court

under Division 2 of Part 9 in relation to the

company or an application has been made to the

Court to approve a compromise under that

Division; or

(d) the company has entered into a compromise with

creditors or a class of creditors under Division 2

of Part 9 or a compromise has been proposed

under that Division in relation to the company;

or

(e) an order restraining its removal from the register

has been made under section 302, or any

conditions specified in an order made under

section 302 have not been satisfied by the

company.

304.Removal from register – (1) As soon as the Registrar

receives a properly completed application to remove a company

from the Samoa register, the Registrar must enter on the register

a notice signed by the Registrar that the company has been

removed from the register in accordance with this Part.

(2) If an application for removal of a company from the

Samoa register under this Part specifies a date on which the

removal is intended to become effective, and that date is the

same as, or later than, the date on which the Registrar receives

the application, the notice of removal must be expressed to have

effect on the date specified in the application.

305. Effect of removal from register – (1) The removal of

a company from the Samoa register under section 304 does not:


(a) prejudice or affect the identity of the body

corporate that was constituted under this Act or

its continuity as a legal person; or

(b) affect the property, rights, or obligations of that

body corporate; or

(c) affect proceedings by or against that body

corporate.

(2) Proceedings that could have been commenced or

continued by or against a company before the company was

removed from the Samoa register under section 304 may be

commenced or continued by or against the body corporate that

continues in existence after the removal of the company from

the register.

PART 13

REGISTRAR OF COMPANIES

Division 1 – Registrar

Sub-division A – Office

306. Registrar – The Minister must appoint a person to

hold office as Registrar of Companies.

307. Deputy Registrars – (1) The Registrar may appoint as

many Deputy Registrars of Companies as may be necessary for

the purposes of this Act.

(2) Subject to the control of the Registrar, a Deputy

Registrar has and may exercise the powers, duties, and

functions of the Registrar under this Act.

(3) The fact that a Deputy Registrar exercises those powers,

duties, or functions is conclusive evidence of his or her

authority to do so.

308. Transitional – The person holding office as Registrar

of Companies under the Companies Act 1955 and any person

holding office as a Deputy Registrar of Companies under that

Act, immediately before the commencement of this Act, is

taken to have been appointed as Registrar of Companies or as a

Deputy Registrar of Companies, as the case may be.


Sub-division B – Notices by Registrar

309. Notices: general – Section 350 applies, with the

necessary modifications, to the giving of notices by the

Registrar.

310. Notices to individuals – (1) A notice that the Registrar

is required by this Act to give to an individual, must be given in

writing and in a manner that the Registrar considers appropriate

in the circumstances.

(2) Without limiting subsection (1), the Registrar may give

notice to an individual by:

(a) having it delivered to that person; or

(b) posting it to that person at his or her last known

postal address; or

(c) faxing it to a fax number used by that person; or

(d) having it published in a newspaper or other

publication in circulation in the area where that

person lives or is believed to live.

311. Admissibility of notices given by Registrar – A

document is admissible in legal proceedings if the document:

(a) appears to be a copy of a notice given by the

Registrar; and

(b) is certified by the Registrar, or by a person

authorised by the Registrar, as having been

derived from a device or facility that records or

stores information electronically or by other

means.

Sub-division C – Powers

312. Registrar may require information and copies of

documents – (1) The Registrar may give notice to a company

requiring that company to provide, by the date specified in the

notice:

(a) corrected or updated details of any matter entered

on any of the registers for that company; or

(b) a certified copy of any document that has been or

ought to have been delivered to the Registrar for


registration under this Act or any other Act for

that company.

(2) The date specified in the notice must not be less than 10

working days from the date on which the notice is sent to the

company.

(3) If a company fails to comply with a notice given under

subsection (1):



units; and




(4) In this section and section 313, “company” includes an

overseas company.

313. Registrar may amend registers – If information

provided to the Registrar by a company under section 312

differs from the information shown on any of the registers for

that company, the Registrar may amend the register

accordingly.

314. Registrar’s powers of inspection – (1) The Registrar,

or any person authorised by the Registrar, may, for the purposes

set out in subsection (2) and if the Registrar considers that it is

in the public interest to do so, do any of the following:

(a) require a person, including a person carrying on the

business of banking, to produce for inspection

relevant documents within that person’s

possession or control;

(b) inspect and take copies of relevant documents;

(c) take possession of relevant documents and remove

them from the place where they are kept, and

retain them for a reasonable time, for the purpose

of taking copies;

(d) retain relevant documents for a period that is, in all

the circumstances reasonable, if there are

reasonable grounds for believing that they are

evidence of the commission of an offence.

(2) The purposes referred to in subsection (1) are:


(a) to ascertain whether a company or a director of a

company is complying, or has complied, with

this Act; or

(b) to ascertain whether the Registrar should exercise

any of his or her rights or powers under this Act;

or

(c) to detect offences against this Act.

(3) A person who fails to comply with subsection (1)(a)




“company” includes an overseas company;

“relevant document”, in relation to a company, means a

document that contains information relating to:

(a) the company; or

(b) money or other property that is, or has been,

managed, supervised, controlled or held in trust

by or for the company.

315. Registrar not to be obstructed – (1) A person must

not obstruct or hinder the Registrar, or a person authorised by

the Registrar, while exercising a power conferred by section

314.




316. Requirement to consult in relation to financial

institutions – The Registrar or a person authorised by the

Registrar must consult with the Central Bank of Samoa before

exercising any of the powers conferred by section 314 of this

Act if the purpose of exercising the power relates to a company

that is a financial institution (within the meaning of section 2 of

the Central Bank of Samoa Act 1984).

317. Certain Acts not affected by Registrar’s power of

inspection – Nothing in sections 313 to 316 of this Act limits

or affects the Tax Administration Act 2012 or the Statistics Act

1971.


318. Disclosure of information and reports – (1) A person

authorised by the Registrar for the purpose of section 314 must,

if directed to do so by the Registrar, give the following

documents, information, or reports to the persons described in

subsection (2):

(a) any document or information obtained in the course

of making an inspection under that section; or

(b) any report prepared in relation to an inspection

under that section.

(2) The persons referred to in subsection (1) are:

(a) the Minister; or

(b) the Secretary; or

(c) any person authorised by the Registrar to receive

the document, information, or report for the

purposes or in connection with the exercise of

powers conferred by this Act; or

(d) a liquidator for the purposes of the liquidation of a

company; or

(e) any person authorised by the Registrar to receive

the document, information, or report for the

purposes of detecting or investigating offences

against any Act.

(3) A person who fails to comply with this section commits


penalty units.

319. Information and report to be given to Registrar –

(1) A person authorised by the Registrar for the purposes of

section 314 must give the following documents, information, or

reports to the Registrar or a Deputy Registrar when directed to

do so by any person who holds any of those offices:

(a) any document or information obtained in the course

of making an inspection under that section; or

(b) any report prepared in relation to an inspection

under that section.

(2) A person who fails to comply with subsection (1)(a) or

(b) commits an offence and is liable on conviction to a fine not


320. Restrictions on disclosing information – (1) A person

authorised by the Registrar for the purposes of section 314 must


not disclose any of the documents, information, or reports

referred to in that section except:

(a) under that section; or

(b) subject to the approval of the Registrar, with the

consent of the person to whom it relates; or

(c) subject to the approval of the Registrar, for the

purposes or in connection with the exercise of

powers conferred by this Act; or

(d) to the extent that the information, or information

contained in the document or report, is available

under any Act or in a public document; or

(e) subject to the approval of the Registrar, to a

liquidator for the purposes of the liquidation of a

company or the assets of an overseas company;

or

(f) in the course of criminal proceedings; or

(g) subject to the approval of the Registrar, for the

purpose of detecting offences against any Act.

(2) A person who fails to comply with this section commits


penalty units.

321. Inspector’s report admissible in liquidation

proceedings – Despite any other Act or rule of law, a report

prepared by a person in relation to an inspection carried out by

him or her under section 314 is admissible in evidence at the

hearing of an application to the Court to appoint a liquidator.

Sub-division D – Appeals

322.Appeals – (1) A person who is aggrieved by an act or

decision of the Registrar under this Act may appeal to the Court

within 15 working days after the date of notification of the act

or decision, or within any further time that the Court may allow.

(2) On hearing the appeal, the Court may:

(a) approve the Registrar’s act or decision;

(b) give any directions that the Court thinks fit;

(c) make any determination in the matter that the Court

thinks fit.


323. Exercise of inspection power not affected by appeal

– Subject to section 324, but despite any other provision of any

Act or any rule of law, if a person appeals or applies to the

Court in relation to an act or decision of the Registrar or a

person authorised by the Registrar under section 314, until a

decision on the appeal or application is given:

(a) the Registrar, or that person, may continue to

exercise the powers under that section as if no

such appeal or application had been made; and

(b) no person is excused from fulfilling an obligation

under that section by reason of that appeal or

application.

324. Destruction and admissibility of Registrar’s

documents – If an appeal or application to which section 323

applies is allowed or granted, as the case may be:

(a) the Registrar must ensure that, immediately after

the decision of the Court is given, any copy of a

document taken or retained by the Registrar, or

by a person authorised by the Registrar in respect

of that act or decision, is destroyed; and

(b) no information acquired under that section in

relation to that act or decision is admissible in

evidence in any proceedings unless the Court

hearing the proceedings in which it is sought to

adduce the evidence is satisfied it was not

obtained unfairly.

Division 2 – Registers kept by Registrar

Sub-division A – Registers

325. Registers – (1) The Registrar must ensure that the

following registers (registers) are kept in any place in Samoa

that the Registrar determines:

(a) a register of companies (Samoa register); and

(b) a register of overseas companies (overseas register);

and

(c) (repealed by the Personal Property Securities Act

2013, No.5).


(2) repealed by the Personal Property Securities Act 2013,

No.5).

(3) The registers may be kept in any manner that the

Registrar thinks fit including, either wholly or partly, by means

of a device or facility:

(a) that records or stores information electronically or

by other means; and

(b) that permits the information so recorded or stored to

be readily inspected or reproduced in usable

form.

Sub-division B – Inspection of Registers

326. Inspection of registers – (1) A person may, on

payment of any prescribed fees, inspect:

(a) a registered document that is part of any of the

registers referred to in section 325(1) (registered

document);

(b) details of any registered document that have been

entered on any device or facility referred to in

section 325(3);

(c) any registered document of which details have been

entered in the device or facility.

(2) The inspection must take place during the hours when

the office of the Registrar is open to the public for the

transaction of business on a working day.

327. Certified copies – A person may, on payment of any

fees that are prescribed, require the Registrar to give or certify:

(a) a certificate of incorporation of a company; or

(b) a copy of, or extract from, a registered document

(c) details of any registered document that have been

entered in any device or facility referred to in

section 325(3); or

(d) a copy of, or extract from, a registered document

details of which have been entered in any such

device or facility.

328. Evidence – (1) A process must not issue from the

Court without the leave of the Court to compel the production

of:


(a) a registered document kept by the Registrar; or

(b) evidence of the entry of details of a registered

document in any device or facility referred to in

section 325(3).

(2) A process that issues from the Court with the leave of

the Court under subsection (1) must have on its face, or attached

to it, a statement that it is issued with the leave of the Court.

(3) A copy of, or extract from, a registered document

certified to be a true copy or extract by the Registrar is

admissible in evidence in legal proceedings to the same extent

as the original document.

(4) An extract certified by the Registrar as containing details

of a registered document that have been entered in any device or

facility referred to in section 325(3) is, in the absence of proof

to the contrary, conclusive evidence of the entry of those

details.

Sub-division C – Registration

329. Registration of documents – As soon as a document

is received for registration under this Act, the Registrar must:

(a) subject to section 330, register the document in the

appropriate register; and

(b) for a document that is not an annual return, give

written advice of the registration to the person

from whom the document was received.

330. Rejection of documents – (1) The Registrar may

refuse to register a document that:

(a) is not in the prescribed form, if any; or

(b) does not comply with this Act or regulations made

under this Act; or

(c) is not printed or typewritten; or

(d) if the relevant register is kept wholly or partly by

means of a device or facility referred to in

section 325(3), is not in a form that enables

details to be entered directly by electronic or

other means in the device or facility; or

(e) has not been properly completed; or

(f) contains material that is not clearly legible; or

(g) is not accompanied by the prescribed fee.


(2) If subsection (1) applies, the Registrar may require either

that:

(a) the document be submitted for registration again,

appropriately amended or completed, or

accompanied by the prescribed fee; or

(b) a fresh document be submitted in its place.

331. When document registered – For the purposes of this

Act, a document is registered when:

(a) the document itself becomes part of the register to

which it relates; or

(b) details of the document are entered in any device or

facility referred to in section 325(3).

332. No presumption of validity or invalidity – Neither

registration, nor refusal of registration, of a document by the

Registrar affects, or creates a presumption as to, the validity or

invalidity of the document or the correctness or otherwise of the

information contained in it.


PART 14

RE-REGISTRATION OF 1955 ACT COMPANIES

333. Period for re-registration – (1) An existing company:

(a) may, of its own volition and with the consent of the

Registrar, reregister under this Act before a

notice has been sent to it under subsection (2);

but

(b) must reregister under this Act in accordance with

section 335 no later than the date specified in a

notice (“specified date”) given under subsection

(2), or any later date fixed by the Registrar under

subsection (4) (“extended specified date”).

(2) The Registrar must give notice to any existing company

that has not already applied to reregister under this Act in the

prescribed form requiring the existing company to reregister

under this Act no later than the specified date, which must be:

(a) at least 60 working days after the date on which the

notice is sent to the company; and

(b) no later than the last day of the transition period.

(3) The Registrar may, but is not required to, give public

notice of any such notice.

(4) The Registrar may, on the application of a company to

which a notice has been given under subsection (2), or of any

director or shareholder of that company, extend the specified

date if the Registrar considers that the application is reasonable

in the circumstances, but the extended specified date must be no

later than the last day of the transition period.

(5) An application under subsection (4) may be made before

or after the specified date.

(6) An existing company that fails to reregister no later than

the specified date or extended specified date, as the case may

be, may reregister at any later time on or before the last day of

the transition period, but:

(a) the amount payable by that company at the time of

re-registration under section 335(3)(b) of this

Act includes all penalties owed by that company

under the Companies Act 1955; and

(b) section 337(1) of this Act will not apply to that

company.


(7) In this Part, “transition period” means the period

beginning on the date of the commencement of this Act and

ending with the close of:

(a) the date that is 2 years after that commencement; or

(b) a later date (if any) that may be prescribed by

regulations made under this Act.

334. Rules of re-registered company – (1) Subject to

subsections (3) and (4), on re-registration:

(a) the memorandum of association of an existing

company is taken to form part of the articles of

association of the company; and to the extent of

any inconsistency between the memorandum of

association and the articles of association of an

existing company, the memorandum of

association prevails; and

(b) the articles of association of an existing company

(which incorporate its memorandum of

association in accordance with paragraph (a))

continue as the rules of the company for the

purposes of this Act; and to the extent that the

articles of association of an existing company

adopt all or any of the articles set out in Table A

of the First Schedule to the Companies Act 1955,

those articles are taken to be incorporated in the

rules of the company as if set out in full in those

rules; and

(c) all shares issued by the existing company before re-

registration are taken to be converted into shares

of no par value; but that conversion does not

affect the rights and obligations attached to the

shares, and, in particular, does not affect—

(i) the entitlements of the holder of the shares

in respect of distributions, voting, the

redemption of any redeemable shares, or

the distribution of surplus assets of the

company in a liquidation:

(ii) any unpaid liability of a shareholder in

respect of a share.

(2) Despite anything in the articles of the existing company,

the holder of a share at the time of re-registration is personally


liable for any liability (including a liability for calls) attached to

the share; and, in the event of a transfer of the share after re-

registration, that liability remains with the shareholder at the

time of re-registration, and does not pass to the transferee of the

share.

(3) An existing company may resolve to adopt the model

rules in Schedule 2, 3, or 4 as its rules on re-registration under

this Act.

(4) An existing company may resolve to adopt new rules

that differ from the model rules on re-registration under this

Act.

(5) A resolution under subsection (3) or (4) must be

approved before re-registration in the same manner as would be

required under the Companies Act 1955 and the company’s

memorandum of association and articles of association for

approval of a resolution altering the company’s articles of

association.

335. Documents to be filed – (1) An application for re-

registration of an existing company under this Act must be

made to the Registrar in the prescribed form.

(2) An application for re-registration of a company must

specify:


(b) whether the company is to be registered under this

Act as a private company or a public company;

and

(c) the full name and residential address and postal

address of any director of the company; and

(d) for a private company, the full name of any

shareholder of the company, and the number and

class of shares held by each shareholder; and

(e) the registered office of the company; and

(f) the postal address of the company, which may be

the postal address of the registered office or any

other postal address; and

(g) details of the location of any records of the

company referred to in section 117 that are not

kept at the registered office of the company.

(3) An application for re-registration must be accompanied

by:


(a) a copy of—

(i) any resolution of the company under section

334(3) or (4); and

(ii) any rules adopted by a company under

section 334(4); or

(iii) certified copies of the existing memorandum

of association and articles of association

of the company, if it is re-registering with

its existing constitutional documents

under section 334(1); and

(b) all amounts due to the Registrar but unpaid by that

company under the Companies Act 1955,

excluding any penalties in respect of which

liability is waived under section 337 of this Act;

and

(c) the prescribed fee for re-registration.

336. Effect of re-registration – (1) As soon as the Registrar

receives an application for re-registration that complies with

section 335, the Registrar must:


(b) issue a certificate of re-registration in respect of the

company in the prescribed form.

(2) A certificate of re-registration of a company issued

under subsection (1) is conclusive evidence that:

(a) all the requirements as to re-registration have been

complied with; and

(b) on and from the date of re-registration stated in the

certificate, the company is registered under this

Act.

(3) The re-registration of an existing company under this

Act does not:

(a) prejudice or affect the identity of the body

corporate that was constituted under the

Companies Act 1955 or its continuity as a legal

person; or

(b) affect the property, rights, or obligations of that

body corporate; or

(c) affect proceedings by or against that body

corporate.


337. Liability of re-registered company for outstanding

amounts under Companies Act 1955 – (1) A company that

reregisters under section 335 of this Act no later than the

specified date or extended specified date, as the case may be,

referred to in section 333 of this Act, and all present and former

directors of that company, are released from liability for any

amounts payable by way of penalty or default fine in respect of

matters that were required to be done by that company before

the date on which this Act comes into force under any of the

following provisions:

(a) section 450 of the Companies Act 1955 (which

relates to carrying on business without an annual

licence);

(b) section 463 of the Companies Act 1955 (which

relates to default fines).

(2) The Registrar must, if requested to do so by an existing

company, advise that company in writing of the amount payable

by it on re-registration under section 335(3)(b).

(3) If the company considers that the amount advised by the

Registrar is incorrect:

(a) the company may appeal to the Court under section

322, and the Court will determine the amount

payable; and

(b) pending determination of that appeal, the company

must pay the amount specified by the Registrar

on re-registration; and

(c) the company’s obligation to reregister no later than

the specified date or extended specified date, as

the case may be, referred to in section 333 is not

affected by any appeal under this section; and

(c) if the appeal is successful, the Registrar must refund

any overpaid amount to the company, together

with interest at a rate fixed by the Court.

338.Failure to re-register – If an existing company fails to

reregister before the expiry of the transition period, the

following provisions apply:

(a) the existing company continues to exist as a

company to which the Companies Act 1955

applies, despite the repeal of that Act by section

352 of this Act, until the existing company is


dissolved or struck off under the Companies Act

1955 or is reregistered under this Act;

(b) the existing company may, despite the expiry of the

transition period, reregister in accordance with

the procedures set out in this Part, which applies

with the necessary modifications, but -

(i) the amount payable by that company at the

time of re-registration under section

335(3)(b) includes all penalties owed by

the existing company under the

Companies Act 1955, as if that Act had

not been repealed; and

(ii) section 337(1) will not apply to the existing

company:

(c) the existing company must not carry on business

until it is reregistered;

(d) if, after the expiry of the transition period, the

existing company is dissolved or struck off the

register under the Companies Act 1955, then

section 353(2) of this Act applies.

PART 15

MISCELLANEOUS

Division 1 – Offences

339. Proceedings for offences – (1) Despite anything to the

contrary in the Criminal Procedure Act 1972, any information

for an offence under this Act may be laid at any time within 3

years after the date of the offence.

(2) Nothing in this Act affects the liability of a person under

any other Act, but no person may be convicted of an offence

against this Act and any other Act in respect of the same

conduct.

340. False statements on documents – (1) A person

commits an offence who, with respect to a document required

by or for the purposes of this Act:

(a) makes, or authorises the making of, a statement in it

that is false or misleading in a material particular

knowing it to be false or misleading; or


(b) omits, or authorises the omission from it of, any

matter knowing that the omission makes the

document false or misleading in a material

particular.

(2) The director or employee of a company commits an

offence who makes or provides, or authorises or permits the

making or providing of, a statement or report that relates to the

affairs of the company and that is false or misleading in a

material particular, to:

(a) a director, employee, auditor, shareholder,

debenture holder, or trustee for debenture holders

of the company; or

(b) an administrator, a liquidator, liquidation

committee, or receiver or manager of property of

the company; or

(c) if the company is a subsidiary, a director, employee,

or auditor of its holding company, knowing it to

be false or misleading.

(3) A person who is convicted of an offence under

subsection (1) or (2) is liable to a fine not exceeding 1000

penalty units or to imprisonment for a term not exceeding 7

years, or both.

(4) For the purposes of this Act, a person who voted in

favour of the making of a statement at a meeting is taken to

have authorised the making of the statement.

341. Fraudulent use or destruction of company property

– (1) The director, employee, or shareholder of a company

commits an offence who:

(a) fraudulently takes or applies property of the

company for his or her own use or benefit, or for

a use or purpose other than the use or purpose of

the company; or

(b) fraudulently conceals or destroys property of the

company.

(2) A person who is convicted of an offence under

subsection (1) is liable to a fine not exceeding 1000 penalty

units or to imprisonment for a term not exceeding 7 years, or

both.


342. Falsification of records – (1) The director, employee,

or shareholder of a company commits an offence who, with

intent to defraud or deceive a person:

(a) destroys, parts with, mutilates, alters, or falsifies, or

is a party to the destruction, mutilation,

alteration, or falsification of any register,

accounting records, book, paper, or other

document belonging or relating to the company;

or

(b) makes, or is a party to the making of, a false entry

in any register, accounting records, book, paper,

or other document belonging or relating to the

company.

(2) A person commits an offence who, in relation to a

mechanical, electronic, or other device used in connection with

the keeping or preparation of any register, accounting or other

records, index, book, paper, or other document for the purposes

of a company or this Act:

(a) records or stores in the device, or makes available

to a person from the device, matter that he or she

knows to be false or misleading in a material

particular; or

(b) with intent to falsify or render misleading any such

register, accounting or other records, index,

book, paper, or other document, destroys,

removes, or falsifies any matter recorded or

stored in the device, or fails or omits to record or

store any matter in the device.

(3) A person who is convicted of an offence against



years, or both.

343. Carrying on business fraudulently – (1) A person

commits an offence who is knowingly a party to a company

carrying on business with intent to defraud creditors of the

company or any other person or for a fraudulent purpose.

(2) The director of a company commits an offence who:

(a) by false pretences or other fraud induces a person to

give credit to the company; or

(b) with intent to defraud creditors of the company—


(i) gives, transfers, or causes a charge to be

given on, property of the company to any

person; or

(ii) causes property to be given or transferred to

any person; or

(iii) caused or was a party to execution being

levied against property of the company.

(3) A person who is convicted of an offence against



years, or both.

Division 2 – Privileged Communications and Service of

Documents

344.Privileged communications – (1) Nothing in this Act

requires a legal practitioner to disclose a privileged

communication.

(2) For the purposes of this Act, a communication is a

privileged communication only if:

(a) it is a confidential communication, whether oral or

written, passing between—

(i) a legal practitioner in his or her professional

capacity and another legal practitioner in

that capacity; or

(ii) a legal practitioner in his or her professional

capacity and his or her client, whether

made directly or indirectly through an

agent; and

(b) it is made or brought into existence for the purpose

of obtaining or giving legal advice or assistance;

and

(c) it is not made or brought into existence for the

purpose of committing or furthering the

commission of an illegal or wrongful act.

(3) If the information or document consists wholly of

payments, income, expenditure, or financial transactions of a

specified person (whether a legal practitioner, his or her client,

or any other person), it is not a privileged communication if it is

contained in, or comprises the whole or part of, a book, account,

statement or other record prepared or kept by the legal


practitioner in connection with a trust account of the legal

practitioner.

(4) The Court may, on the application of any person,

determine whether or not a claim of privilege is valid and may,

for that purpose, require the information or document to be

produced.

(5) In this Act, “legal practitioner” means a barrister or

solicitor of the Supreme Court, and references to a legal

practitioner include a firm in which he or she is a partner or is

held out to be a partner.

345. Service of documents on companies in legal

proceedings – A document, including a writ, summons, notice,

or order, in any legal proceedings may be served on a company

as follows:

(a) by delivery to a person named as a director of the

company on the Samoa register; or

(b) by delivery to an employee of the company at the

company’s head office or principal place of

business; or

(c) by leaving it at the company’s registered office; or

(d) by serving it in accordance with any directions as to

service given by the court having jurisdiction in

the proceedings; or

(e) in accordance with an agreement made with the

company; or

(f) by serving it at an address for service given in

accordance with the rules of the court having

jurisdiction in the proceedings or by such means

as a solicitor has, in accordance with those rules,

stated that the solicitor will accept service.

346. Service of other documents on companies – A

document, other than a document in any legal proceedings, may

be served on a company as follows:

(a) by any of the methods set out in section 345(a), (b),

(c), or (e);

(b) by posting it to the company’s postal address;

(c) by faxing it to a fax number at the company’s

registered office or its head office or principal

place of business.


347.Service of documents on overseas companies in legal

proceedings – A document, including a writ, summons, notice,

or order, in any legal proceedings may be served on an overseas

company in Samoa as follows:

(a) by delivery to a person named in the overseas

register as a director of the overseas company

and who is resident in Samoa:

(b) by delivery to a person named in the overseas

register as being authorised to accept service in

Samoa of documents on behalf of the overseas

company:

(c) by delivery to an employee of the overseas

company at the overseas company’s place of

business in Samoa or, if the overseas company

has more than 1 place of business in Samoa, at

the overseas company’s principal place of

business in Samoa:

(d) by serving it in accordance with any directions as to

service given by the court having jurisdiction in

the proceedings:

(e) in accordance with an agreement made with the

overseas company.

348. Service of other documents on overseas companies –

A document, other than a document in any legal proceedings,

may be served on an overseas company as follows:

(a) by any of the methods set out in section 347(a), (b),

(c), or (e);

(b) by posting it to the postal address in Samoa of the


(c) by posting it to the postal address of a person

named in the overseas register as being

authorised to accept service in Samoa of

documents on behalf of the overseas company;

(d) by faxing it to a fax number at the principal place of

business in Samoa of the overseas company.

349. Service of documents on shareholders and creditors

– (1) A notice, statement, report, accounts, or other document to


be sent to a shareholder or creditor who is a natural person may

be:

(a) delivered to that person; or

(b) posted to that person’s postal address; or

(c) faxed to a fax number used by that person.

(2) A notice, statement, report, accounts, or other document

to be sent to a shareholder or creditor that is a company or an

overseas company may be sent by any of the methods of serving

documents referred to in section 345 or 347.


to be sent or given to a creditor that is a body corporate, not

being a company or an overseas company, may be:

(a) delivered to a person who is a principal officer of

the body corporate; or

(b) delivered to an employee of the body corporate at

the principal office or principal place of business

of the body corporate; or

(c) delivered in such manner as the Court directs; or

(d) delivered in accordance with an agreement made

with the body corporate; or

(e) posted to the postal address of the body corporate;

or

(f) faxed to a fax number at the principal office or

principal place of business of the body corporate.

350. Additional provisions relating to service – (1)

Subject to subsection (2), for the purposes of sections 345 to

349:

(a) if a document is to be served by delivery to a

natural person, service must be made—

(i) by handing the document to the person; or

(ii) if the person refuses to accept the document,

by bringing it to the attention of, and

leaving it in a place accessible to, the

person;

(b) a document that is posted is taken to be received 5

working days after it is posted;

(c) a document that is faxed is taken to have been

received on the working day following the day

on which it was faxed;


(d) in proving service of a document by post, it is

sufficient to prove that—

(i) the document was properly addressed; and

(ii) all postal or delivery charges were paid; and

(iii) the document was posted;

(e) in proving service of a faxed document, it is

sufficient to prove that the document was

properly faxed to the person concerned.

(2) A document is taken not to have been served or sent or

delivered to a person if the person proves that, through no fault

on the person’s part, the document was not received within the

time specified.

Division 3 – Regulation-Making Powers

351.Regulations – (1) The Head of State, acting on the

advice of Cabinet, may make regulations for all or any of the

following purposes:

Fees

(a) prescribing fees or other amounts payable to the

Registrar in respect of the performance of

functions and the exercise of powers under this

Act;

(b) prescribing amounts payable to the Registrar by

way of penalty for failure to deliver a document

to the Registrar within the time prescribed by

this Act;

(c) prescribing fees or other amounts payable to the

Registrar in respect of any other matter under

this Act;

(d) prescribing fees or other amounts payable to the

Registrar of the Supreme Court in respect of any

Court proceedings under this Act;

Forms

(e) prescribing forms (including Court forms) for the

purposes of this Act; and those regulations may

require—

(i) the inclusion in, or attachment to, forms of

specified information or documents;

(ii) forms to be signed by specified persons;

Registration Requirements


(f) prescribing requirements, not inconsistent with this

Act, with which documents delivered for

registration must comply;

Financial Reporting Requirements

(g) regulating the financial reporting of a company,

overseas company, or class of companies or

overseas companies, including (without

limitation)—

(i) prescribing requirements in respect of the

adoption by directors of a balance date

for a company;

(ii) regulating changes to the balance date of a

company;

(h) prescribing requirements, not inconsistent with this

Act, in relation to the form or content of

financial statements, or any other matters in

respect of financial statements, including

(without limitation)—

(i) prescribing different requirements in respect

of different classes of company:

(ii) requiring compliance with standards issued

or published by a specified body or

bodies, with or without modifications:

Liquidations

(i) regulating, in a manner not inconsistent with this

Act, the conduct of liquidations;

(j) fixing an amount or prescribing a rate or rates in

respect of the remuneration of liquidators, and

without limiting what may be prescribed by such

regulations, such regulations may—

(i) prescribe an hourly or other rate or rates of

remuneration and different rates may be

prescribed in respect of work undertaken

in the liquidation by different classes of

persons;

(ii) prescribe a rate or rates by reference to the

net value of the assets realised by the

liquidator, together with such other

amounts as may be specified;


(iii) prescribe a rate or rates in respect of the

exercise of a particular function or

power;

(iv) prescribe a rate or rates by reference to any

other criteria that may be specified;

Court Proceedings

(k) providing for and regulating any Court proceedings

under this Act;

Exemption from Requirements of Part 11

(l) providing for any class or classes of overseas

company to be exempted from the application of

any or all of the requirements of Part 11, or

modifying the application of Part 11 to such

overseas companies, on any terms and

conditions;

Transitional and Savings Provisions

(m) prescribing transitional and savings provisions

relating to the coming into force of this Act;

General

(n) providing for any other matters contemplated by

this Act, necessary for its administration, or

necessary for giving it full effect.

(2) The Registrar or the Registrar of the Supreme Court, as

the case may require, may refuse to perform a function or

exercise a power until the prescribed fee or amount is paid.

(3) Any regulations made under subsection (1) may

authorise the Registrar or the Registrar of the Supreme Court, as

the case may require, to waive, in whole or in part and on any

conditions that may be prescribed, payment of any amount

referred to in paragraph (b) or (d) of that subsection.

(4) If the Registrar requires a company to change its name,

no fee is payable in respect of an application to change the

name of the company.

(5) Any fee or amount payable to the Registrar or to the

Registrar of the Supreme Court, as the case may require, is

recoverable by the Registrar or the Registrar of the Supreme

Court, as the case may require, in any court of competent

jurisdiction as a debt due to the State.

Division 4 – Repeal and Transitional Provisions


352. Repeals and revocations – (1) The Companies Act

1955 is repealed on the expiry of the transition period.

(2) The Samoa Companies Order 1935 and any other

regulations and rules that are made under or in respect of the

Companies Act 1955 are revoked on the expiry of the transition

period.

353. General transitional provisions and savings – (1)

Without limiting anything in the Acts Interpretation Act 1974,

nothing in this Act applies to or affects:

(a) any company on which a demand under section

218(a) of the Companies Act 1955 has been

served before the commencement of this Act.

(b) any application to the Court for the winding up of a

company made before that commencement;

(c) any resolution of a company to be wound up by the

Court passed before that commencement;

(d) any resolution of a company for voluntary winding

up passed before that commencement;

(e) any order made by the Court under Part VI of the

Companies Act 1955 before that

commencement;

(f) any company that has been dissolved under the

Companies Act 1955 before that

commencement;

(g) any notice given by the Registrar to a company

before that commencement in relation to striking

off the register the company under section 336 of

the Companies Act 1955;

(h) any company struck off the register under section

336 of the Companies Act 1955.

(2) The relevant provisions of the Companies Act 1955, and

any rules and regulations made under or in respect of that Act,

as in force immediately before the commencement of this Act,

continue to apply, with all necessary modifications, to the

matters set out in subsection (1) as if the Companies Act 1955

had not been repealed and as if those rules and regulations had

not been revoked.


SCHEDULE 1

(Section3(A))

INTERPRETATION

CONTENTS

1. Definitions

2. Meaning of subsidiary

3. Meaning of holding company

4. Meaning of related company

5. Meaning of solvency test

__________

1. Definitions – In this Act, unless the context otherwise

requires:

“accounting period”, in relation to a company, means a year

ending on a balance date of the company and, if as a

result of the date of the registration of the company or a

change of the balance date of the company, the period

ending on that date is longer or shorter than a year, that

longer or shorter period is an accounting period;

“administrator” means an administrator appointed under

Division 1 of Part 9;

“alteration document” means a document that provides for

the alteration of a registered charge;

“arrangement” includes a reorganisation of the share capital

of a company by the consolidation of shares of different

classes, or by the division of shares into shares of

different classes, or by both those methods;

“assignee” means the person to whom the benefit of a

registered charge is assigned;

“assignment document” means a document that provides for

the assignment of a registered charge;

“balance date”, in relation to a company, means the close of

31 March or of any other date that the directors of the

company adopt as the company’s balance date in

accordance with any regulations made under this Act;

“board and board of directors”, in relation to a company,

means:


(a) directors of the company who number not less than

the required quorum acting together as a board of

directors; or

(b) if the company has only 1 director, that director;

“broadcasting” means any transmission of programmes,

whether or not encrypted, by radio waves or other means

of telecommunication for reception by the public by

means of broadcasting receiving apparatus; but does not

include any such transmission of programmes:

(a) made on the demand of a particular person for

reception only by that person; or

(b) made solely for performance or display in a public

place;

“charge document”:

(a) means a document that creates, or provides for, a

company charge; and

(b) for an issue by a company of a series of debentures,

includes a deed that contains, or refers to, a

charge created by the company that entitles the

debenture holders of the series to rank equally;

“committee of creditors”, in relation to a company under

administration, means a committee of creditors of the

company appointed under Division 1 of Part 9;

“company” means a company registered or reregistered

under this Act;

“compromise” means a compromise between a company

and its creditors, including a compromise:

(a) cancelling all or part of a debt of the company; or

(b) varying the rights of its creditors or the terms of a

debt; or

(c) relating to an alteration of a company’s rules that

affects the likelihood of the company being able

to pay a debt;

“convening period”, in relation to an administration of a

company:

(a) means a period of 20 working days commencing on

the day when the administration begins; and

(b) includes any extension to that period granted by the

Court;

“court officer” means a constable or the Registrar or other

officer of the Court;


“Court” means the Supreme Court;

“creditor”:

(a) in Division 2 of Part 8 (Approval of amalgamations,

etc.,), Division 1 of Part 9 (Administrations), and

Division 2 of Part 9 (Compromises) includes—

(i) a person who, in a liquidation, would be

entitled to claim that a debt is owing to

that person by the company; and

(ii) a secured creditor;

(b) in Division 3 of Part 9 (liquidations)—

(i) means a person who, in a liquidation, would

be entitled to claim in accordance with

clause 2 of Schedule 18 that a debt is

owing to that person by the company;

and

(ii) includes a secured creditor only—

(A) for the purposes of sections 218,

222, and 255 and clause 5 of

Schedule 15; or

(B) to the extent of the amount of any

debt owing to the secured creditor

in respect of which the secured

creditor claims under Part 2 of

Schedule 18 as an unsecured

creditor;

“decision period”, in relation to a charge on property of a

company under administration, means the period:

(a) beginning on the day when—

(i) if notice of the appointment of the

administrator must be given to the

secured creditor, the notice is given; or

(ii) otherwise, the administration begins; and

(b) ending at the end of 15 working days after that day;

“director”, in relation to a company—

(a) includes a person occupying the position of director

of the company by whatever name called; but

(b) does not include a receiver;

“directors” has the same meaning as the definitions of board

and board of directors;

“distribution”, in relation to a distribution by a company to a

shareholder, means:


(a) the direct or indirect transfer of money or property,

other than the company’s own shares, to or for

the benefit of the shareholder; or

(b) the incurring of a debt to or for the benefit of the

shareholder, in relation to shares held by that

shareholder, whether by means of a dividend, a

purchase, redemption or other acquisition of

shares, a distribution of indebtedness, or some

other means;

“document”:

(a) means information in written or electronic form, or

both; and

(b) includes anything from which information can be

reproduced (with or without the aid of anything

else);

“electronic” includes electrical, digital, magnetic, optical,

electromagnetic, biometric, and photonic;

“enforce”, in relation to a charge on property of a company

under administration, includes:

(a) appointing a receiver of property of the company

under a power contained in a charge document;

or

(b) obtaining an order for the appointment of a receiver

of the property for the purpose of enforcing the

charge; or

(c) entering into possession, or assume control, of the

property for that purpose; or

(d) appointing a person to enter into possession or

assume control (whether as agent for the secured

creditor or for the company); or

(e) exercising, as secured creditor or as a receiver or

person so appointed, a right, power, or remedy

existing because of the charge, whether arising

the charge document, under a written or

unwritten law, or otherwise:

“enforcement process”, in relation to property, means:

(a) execution against that property; or

(b) any other enforcement process in relation to that

property that involves a Court;

“essential service” means:

(a) the retail supply of electricity;


(b) the retail supply of fuel and other similar

consumable items necessary for the generation of

electricity;

(c) the retail supply of gas;

(d) the supply of water;

(e) telecommunications services;

“existing charge” means a charge that, immediately before

the commencement of this Act, was created by an

existing company or overseas company, as the case may

be existing company means a body corporate registered

or taken to be registered under Part II or Part X of the

Companies Act 1955, or under the Companies Act 1933,

the Companies Act 1908, the Companies Act 1903, the

Companies Act 1882, or the Joint Stock Companies Act

1860;

“existing register of charges means the register of charges

that, immediately before the commencement of this Act,

was maintained by the Registrar under Part 1V of the

Companies Act 1955 for each existing company and

overseas company;

“financial statements”, in relation to a company and a

balance date, means:

(a) a statement of financial position for the company as

at the balance date; and

(b) for a company—

(i) trading for profit, a statement of financial

performance for the company in relation

to the accounting period ending at the

balance date; and

(ii) not trading for profit, an income and

expenditure statement for the company in

relation to the accounting period ending


(c) if required by regulations made under this Act, a

statement of cash flows for the company in

relation to the accounting period ending on the

balance date; and

(d) any other financial statements in relation to the

company or any group of companies of which it

is the holding company as may be required by

regulations made under this Act; and


(e) any notes or documents giving information relating

to the statement of financial position and other

statements;

“information” includes information (whether in its original

form or otherwise) that is in the form of a document, a

signature, a seal, data, text, images, sound, or speech;

“Government” means the Independent State of Samoa;

“liquidator” means a liquidator appointed under Part VI of

the Companies Act 1955 or under Division 3 of Part 9 of

this Act, as the case may be major transaction has the

meaning set out in section 50(2);

“model rules” means the model rules of incorporation set

out in Schedule 2, 3, or 4;

“Minister” means the Minister responsible for the

administration of this Act;

“Official Assignee” means an Official Assignee or Deputy

Assignee appointed under the Bankruptcy Act 1908;

“onerous property”:

(a) means—

(i) an unprofitable contract; or

(ii) property of the company that is un-saleable,

or not readily saleable, or which may

give rise to a liability to pay money or

perform an onerous act; but

(b) does not include—

(i) a netting agreement to which Part 5 of

Schedule 18 applies; or

(ii) any contract of the company that constitutes

a transaction under a netting agreement.

“overseas company” means a corporation that is

incorporated outside Samoa, whether or not it is

registered under Part 11;

“overseas register” means the register kept by the Registrar

under section 325(1)(b);

“penalty unit” has the same meaning as in section 4 of the

Fines (Review and Amendment) Act 1998;

“preferential claim” means a claim referred to in Part 3 of

Schedule 18 (except clause 16 of that Schedule);

“prescribed form” means a form prescribed by regulations

or, if no form is prescribed by regulations, a form

approved by the Registrar;


“priority document” means a document that has the effect of

postponing the priority of a registered charge;

“private company” means a company that is registered as a

private company on the Samoa register;

“property” includes:

(a) real and personal property; and

(b) an estate or interest in real or personal property; and

(c) a debt; and

(d) a thing in action; and

(e) any other rights, interests, and claims of any kind in

relation to property;

“proponent” means a person who proposed a compromise in

accordance with Division 2 of Part 9;

“public accountant” means a public accountant within the

meaning of the Public Accountants Act 1984;

“public company” means a company that is registered as a

public company on the Samoa register;

“receiver” has the same meaning as in section 4(1) of the

Receiverships Act 2006;

“registered charge” means a charge, mortgage or other

pledge that is registered under any Act governing the

registration or filing of charges, mortgages or other

pledges against company property;

“registered document” means a document:

(a) that forms part of any of the registers referred to in

section 325(1);

(b) details of which have been entered in any device or

facility referred to in section 325(3);

“registered office”, in relation to a company, has the

meaning set out in section 17;

“Registrar” means the Registrar of Companies appointed

under section 306;

“rules” means the rules of incorporation of a company;

“Samoa register” means the register kept by the Registrar

under section 325(1)(a);

“Secretary” means the chief executive of the department

that is, with the authority of the Prime Minister, for the

time being responsible for the administration of this Act;

“shareholder” means a person whose name is entered on the

share register of a company as the holder of 1 or more

shares in the company;


“solvency test” means the solvency test referred to in clause

5 of this Schedule;

“special resolution” means a resolution:

(a) approved under section 52; or

(b) approved at a meeting of shareholders called to

consider that resolution on not less than 10

working days’ notice—

(i) by a majority of 75% (or such higher

majority as may be specified in the rules)

of the votes of shareholders entitled to

vote and voting on the question; and

(ii) in accordance with any additional

requirements specified in the rules in

respect of such resolutions;

“telecommunications services”:

(a) means the conveyance by electromagnetic means

from 1 device to another of any encrypted or

non-encrypted sign, signal, impulse, writing,

image, sound, instruction, information, or

intelligence of any nature, whether for the

information of any person using the device or

not; but

(b) does not include any conveyance that constitutes

broadcasting;

“working day” means a day of the week other than:

(a) Saturday and Sunday;

(b) a day that is defined as, or declared to be, a public

holiday under the Shops Ordinance 1961 or any

other Act;

“writing” includes representing or reproducing words,

figures, or symbols:

(a) in a visible and tangible form by any means and in

any medium;

(b) in a visible form in any medium by electronic

means that enables them to be stored in

permanent form and be retrieved and read.

2 Meaning of subsidiary – (1) For the purposes of this

Act, a company is a subsidiary of another company if, but only

if:

(a) that other company—


(i) controls the composition of the board of the

company; or

(ii) is in a position to exercise, or control the

exercise of, more than one-half the

maximum number of votes that can be

exercised at a meeting of the company; or

(iii) holds more than one-half of the issued

shares of the company, other than shares

that carry no right to participate beyond a

specified amount in a distribution of

either profits or capital; or

(iv) is entitled to receive more than one-half of

any dividend paid on shares issued by the

company, other than shares that carry no

right to participate beyond a specified

amount in a distribution of either profits

or capital; or

(b) the company is a subsidiary of a company that is

that other company’s subsidiary.

(2) In sub-clause (1), “company” includes a corporation.

3.Meaning of holding company – (1) For the purposes of

this Act, a company is another company’s holding company if

that other company is its subsidiary.


4. Meaning of related company – (1) For the purposes of

this Act, a company is related to another company if:

(a) the other company is its holding company or

subsidiary; or

(b) more than half of the issued shares of the company,

other than shares that carry no right to participate

beyond a specified amount in a distribution of

either profits or capital is held by the other

company and companies related to that other

company (whether directly or indirectly, but

other than in a fiduciary capacity); or

(c) more than half of the issued shares, other than

shares that carry no right to participate beyond a

specified amount in a distribution of either

profits or capital, of each of them is held by


members of the other (whether directly or

indirectly, but other than in a fiduciary capacity);

or

(d) the businesses of the companies have been so

carried on that the separate business of each

company, or a substantial part of it, is not readily

identifiable; or

(e) there is another company to which both companies

are related; and “related company” has a

corresponding meaning.


5. Meaning of solvency test – (1) For the purposes of this

Act, a company satisfies the solvency test if:

(a) the company is able to pay its debts as they become

due in the normal course of business; and

(b) the value of the company’s assets is not less than

the value of its liabilities.

(2) A person required to consider whether a company

satisfies the solvency test in sub-clause (1) may have regard to:

(a) financial statements prepared on the basis of

accounting practices and principles that are

reasonable in the circumstances; and

(b) valuations of assets or liabilities; and

(c) such other information in relation to the financial

position of the company as is reasonable in all

the circumstances.

(3) If the rules of a company provide for a solvency margin

that must be maintained by the company, sub-clause (1)(b)

applies in relation to that company as if that solvency margin

were a liability of the company, except where the surplus assets

of the company are being distributed:

(a) in a liquidation; or

(b) before the removal of the company from the Samoa

register in accordance with Part 10.


SCHEDULE 2

(Sections3(b), 6(2)(c), 14(1)(b)and15(1))

MODEL RULES FOR PRIVATE COMPANY

CONTENTS

PART 1

GENERAL PROVISIONS

1 Name of company

2 Private company

3 Rules

PART 2

SHARES AND

SHAREHOLDERS

Division 1 – GENERAL

PROVISIONS

4 Number of shares

5 Rights attaching to shares

6 Issue of shares

7 Process for issuing shares

8 Transferability of shares

Division 2 – SHARE RGISTER

9 Company to keep share

register

10 Form and location of share

register

11 Status of registered

shareholder

Division 3 – PRE-EMPTIVE

RIGHTS

12 Restriction on selling shares

13 Selling shareholder to give

written notice to company

14 Company to give written

notice to shareholders

15 Written notice is offer by

selling shareholder

16 Notice agreeing to purchase

shares given within specified

time

17 Notice agreeing to purchase

shares not given within

specified time

18 No shareholder wishes to

purchase selling

shareholder’s shares

19 Selling shareholder not

obliged to sell some shares

20 Directors may require

evidence of terms

Division 4 – TRANSFER OF

SHARES

21 Transfer of shares

22 Share certificates

Division 5 – MEETING OF

SHAREHOLDERS

23 Meetings of shareholders

24 Notice of meetings

25 Methods of holding meetings

26 Quorum

27 Chairperson

28 Voting

29 Votes of joint shareholders

30 Proxies

31 Corporations may act by

representatives

32 Minutes

Division – 6

MISCELLANEOUS

33 Annual meetings and special

meetings of shareholders


34 Written resolutions of

shareholders

35 Voting in interest groups

36 Shareholders entitled to

receive distributions


exercise pre-emptive rights


attend and vote at meeting

39 Distributions to shareholders

40 Company may acquire its

own shares an provide

financial assistance

41 Annual report to

shareholders

42 Deemed approval by all

shareholders for certain

purposes

PART 3

DIRECTORS

43 Appointment and removal of

directors

44 Resignation of director

45 Notice of change in directors

46 Powers and duties of

directors

47 Standard of care of directors

48 Obligations of directors in


49 Interested directors

50 Use and disclosure of

company information

51 Indemnities and insurance

for directors or employees

52 Remuneration of directors

53 Procedure at meeting of

directors

54 Chairperson

55 Notice of meeting

56 Methods of holding meetings

57 Quorum

58 Voting

59 Minutes

60 Unanimous resolution

61 Managing director and other

executive directors

62 Delegation to managing

director

63 Remuneration of managing

director and directors

PART 4

COMPANY RECORDS

64 Company records

65 Form of records

66 Access to records

67 Documents to be sent to

Registrar

68 Documents to be sent to

shareholders

PART 5

ACCOUNTS AND AUDIT

69 Accounting records to be

kept

70 Financial statements to be

prepared

71 Appointment of auditor

72 Auditor’s attendance at


PART 6

LIQUIDATION AND

REMOVAL FROM

REGISTER

73 Resolution to appoint

liquidator

74 Distribution of surplus assets

PART 7

MISCELLANEOUS

75 Service of documents on

shareholders

76 Interpretation


PART 1

GENERAL PROVISIONS

1. Name of company – (1) The name of the company at

the time of registration under the Act appears on the application

for registration or for re-registration, as the case may be.

(2) The name of the company may be changed under section

11 of the Act only with the prior approval of all shareholders.

2. Private company – (1) The company is a private

company.

(2) The company must not offer any of its shares or other

securities to the public.

(3) The company must not have more than 100

shareholders.

(4) If a share transfer is presented to the company for entry

on the share register which would result in a breach of this

restriction, the directors must decline to register the transfer.

3. Rules – (1) The company may adopt new rules in place

of these rules by special resolution, in accordance with section

14(2) of the Act.

(2) Subject to the Act:

(a) these rules have effect and may be enforced as if

they constituted a contract—

(i) between the company and its share-holders;

and

(ii) between the company and each director; and

(b) the shareholders and directors of the company have


in these rules.

PART 2

SHARES AND SHAREHOLDERS

Division 1 – GENERAL PROVISIONS

4. Number of shares – (1) At the time of registration

under the Act the company has the number of shares specified

in the application for registration or re-registration, as the case

may be.


(2) If the company was first registered under Part 2 of the

Act, the company must immediately after its registration issue

to any person named in the application for registration as a

shareholder the number of shares specified in the application as

being the number of shares to be issued to that person or those

persons.

5. Rights attaching to shares – Subject to clause 7(2),

each share carries the following rights:



resolution to—

(i) appoint or remove a director or auditor -





(vi) approve re-registration of the company as a

public company;

(vii) put the company into liquidation;




company;



6. Issue of shares – The directors may issue shares:

(a) under clause 7; or

(b) to shareholders or any other persons on any other

basis, with the prior approval of all shareholders.

7. Process for issuing shares – (1) The directors may

issue shares in accordance with the following process:

(a) the shares must first be offered to all shareholders

proportionally, pursuant to an offer that if

accepted by all shareholders would not affect

relative voting or distribution rights, on such

terms as the directors think fit. The shareholders

must have a reasonable opportunity to consider

and respond to the offer;


(b) any shares not accepted by the shareholders to

whom they were offered under paragraph (a)

must then be offered to those shareholders who

did accept the shares offered to them under

paragraph (a), on a fair and equitable basis

determined by the directors and on the same

terms and conditions as the offer made under

paragraph (a);

(c) any shares offered under paragraph (b) but not

taken up by shareholders may then be offered by

the directors to shareholders or any other persons

in such manner as the directors think fit, on the

same terms and conditions as the offer made

under paragraph (a).

(2) With the prior approval of all shareholders, the company

may issue more than 1 class of shares. In particular, shares may

be issued that:

(a) are redeemable; or


or income; or


or

(d) do not confer voting rights.

(3) If the company issues shares, it must give the prescribed

notice to the Registrar under section 26(2) of the Act within 10

working days of the issue of any shares.

(4) If the rights attached to the shares differ from those set

out in clause 5, the notice must be accompanied by a document


8. Transferability of shares – The shares of the company

are, subject to clauses 12(1) and 21(4) and their terms of issue,

transferable by entry in the share register under clause 21(1) to

(3).

Division 2 – SHARE REGISTER

9. Company to keep share register – (1) The company









(c) the date of any—

(i) issue of shares to; or

(ii) repurchase or redemption of shares from; or

(iii) transfer of shares by or to,–

each shareholder within the last 7 years, and in

relation to the transfer, the name of the person to

or from whom the shares were transferred.

(2) No notice of a trust, whether express, implied, or

constructive, may be entered on the share register.

(3) The company may appoint an agent to maintain the

share register.

10. Form and location of share register – The share

register must be kept:

(a) in a form that complies with clause 65; and

(b) at the company’s registered office, or at any other

place in Samoa notice of which has been given to

the Registrar under section 119 of the Act.

11. Status of registered shareholder – (1) The company

must treat the registered holder of a share as the only person

entitled to:





share.

(2) If a joint holder of a share dies, the remaining holders

must be treated by the company as the holders of that share.

(3) If the sole holder of a share dies, that shareholder’s legal

representative is the only person recognised by the company as

having any title to or interest in the share.

(4) Any person who becomes entitled to a share as a

consequence of the death, bankruptcy or insolvency or

incapacity of a shareholder may be registered as the holder of

that shareholder’s shares on making a request in writing to the


company to be so registered, accompanied by proof satisfactory

to the directors of that entitlement.

Division 3 – PRE-EMPTIVE RIGHTS

12. Restriction on selling shares – (1) A shareholder is not

entitled to sell or otherwise dispose of his or her shares in the

company without first offering to sell them to the other holders

of shares of the same class under the procedure set out in

clauses 13 to 20, unless all the other shareholders agree

otherwise.

(2) Any share transfer delivered to the company by a

shareholder who has not complied with sub-clause (1) is of no

effect, and the transfer must not be entered on the share register.

13. Selling shareholder to give written notice to company

– A shareholder who wishes to dispose of some or all of his or

her shares (selling shareholder) must give written notice to the

company of:

(a) the number of shares to be sold; and

(b) the price at which the selling shareholder is willing

to sell the shares.

14. Company to give written notice to shareholders – The

company must within 10 working days give a copy of the

written notice referred to in clause 13 to each shareholder,

together with a notice advising each holder of shares of the

same class:

(a) that that shareholder is entitled to purchase a

proportional number of the shares that the selling

shareholder wishes to sell (rounded in an

appropriate manner determined by the directors);

and

(b) that if that shareholder wishes to purchase those

shares, he or she must give written notice to that

effect to the company within 10 working days of

the date of the notice.

15. Written notice is offer by selling shareholder – The

notice referred to in clause 14 is taken to be an offer by the


selling shareholder to the recipient to sell the number of shares

referred to in the notice at the price specified by the selling

shareholder in the notice given under clause 13, on the terms set

out in these rules.

16. Notice agreeing to purchase shares given within

specified time – Subject to clause 19, if a notice is given by a

shareholder within the specified time agreeing to purchase the

shares offered to that shareholder in a notice given under clause

14:

(a) there is deemed to be a contract between that

shareholder and the selling shareholder for the

sale and purchase of the relevant number of

shares; and

(b) the company must immediately advise the selling

shareholder of the acceptance, and send him or

her a copy of—

(i) the notice given under clause 14 by the

company; and

(ii) the notice of acceptance given by the

shareholder in question.

17. Notice agreeing to purchase shares not given within

specified time – (1) If any shareholder does not give notice

agreeing to purchase the shares offered to that shareholder

within the specified time, the shares that were offered to that

shareholder must be offered to those shareholders who did

accept the shares offered to them, on a fair and equitable basis

determined by the directors.

(2) Clauses 15 and 16 apply to any notice given to a

shareholder, and to any notice of acceptance given by a

shareholder, under this clause.

18. No shareholder wishes to purchase selling

shareholder’s shares – If no shareholder wishes to purchase

the selling shareholder’s shares at the specified price, the selling

shareholder may, at any time in the 12 months following the

giving of notice by the selling shareholder, sell some or all of

those shares to any other person at a price not less than the

specified price.


19. Selling shareholder not obliged to sell some shares –

(1) The selling shareholder is not obliged to sell some only of

the shares that he or she wishes to dispose of.

(2) In the event that the selling shareholder has not been

notified under clause 16 of acceptances by other shareholders in

respect of all the shares referred to in the notice given under

clause 13 within 40 working days of the date on which that

notice was given to the company, the selling shareholder may at

his or her option give written notice to the company terminating

the offer to sell the shares to the other shareholders.

(3) If such a notice is given, clause 18 applies as if no

shareholder had wished to purchase the selling shareholder’s

shares.

20. Directors may require evidence of terms – The

directors may require reasonable evidence of the terms

(including price) on which the shares were sold to accompany

any share transfer in respect of those shares.

Division 4 – TRANSFER OF SHARES

21. Transfer of shares – (1) If shares are to be transferred,

a form of transfer signed by the holder or by his or her agent or

attorney must be delivered to the company.




(3) Subject to clause 12 and sub-clause (4), the company

must immediately on receipt of a properly executed share

transfer enter the name of the transferee in the share register as

holder of the shares transferred.

(4) The directors may resolve to refuse to register a transfer

of a share within 30 working days of receipt of the transfer, if

any amount payable to the company by the shareholder is due

but unpaid.

(5) If the directors resolve to refuse to register a transfer for

this reason, they must give notice of the refusal to the

shareholder within 5 working days of the date of the resolution.





(2) In receipt of an application for a share certificate under

sub-clause (1), the company must, within 20 working days after

receiving the application








stating—


(ii) the class of shares held by the shareholder;

and



relates.




accompanied by:



required, an indemnity in a form determined by

the directors.






Division 5 – MEETINGS OF SHAREHOLDERS

23. Meetings of shareholders – (1) Clauses 24 to 32 set out

the procedure to be followed at and in relation to meetings of

shareholders.

(2) A meeting of shareholders may determine its own

procedure to the extent that it is not governed by these rules.


24. Notice of meetings – (1) Written notice of the time and

place of a meeting of shareholders must be given to any

shareholder entitled to receive notice of the meeting and to any

director and any auditor of the company not less than 10

working days before the meeting.

(2) The notice must set out:

(a) the nature of the business to be transacted at the

meeting in enough detail to enable a shareholder

to form a reasoned judgment in relation to it; and

(b) the text of any special resolution to be submitted to

the meeting.

(3) An irregularity in a notice of a meeting is waived if all

the shareholders entitled to attend and vote at the meeting attend

the meeting without protest as to the irregularity, or if all such

shareholders agree to the waiver.

(4) An accidental omission to give notice of a meeting to, or

the failure to receive notice of a meeting by, a shareholder does

not invalidate the proceedings at that meeting.

(5) If a meeting of shareholders is adjourned for less than 30

working days, it is not necessary to give notice of the time and

place of the adjourned meeting other than by announcement at

the meeting that is adjourned.

25. Methods of holding meetings – A meeting of

shareholders may be held either:

(a) by a number of shareholders, who constitute a

quorum, being assembled together at the place,

date and time appointed for the meeting; or

(b) by means of audio, or audio and visual,

communication by which all shareholders

participating and constituting a quorum, can

simultaneously hear each other throughout the

meeting.

26. Quorum – (1) Subject to sub-clause (3), no business

may be transacted at a meeting of shareholders if a quorum is

not present.

(2) A quorum for a meeting of shareholders is present if

shareholders or their proxies are present who are between them


able to exercise a majority of the votes to be cast on the

business to be transacted by the meeting.

(3) If a quorum is not present within 30 minutes after the

time appointed for the meeting, the meeting is adjourned to the

same day in the following week at the same time and place or to

such other date, time and place as the directors may appoint.

(4) If, at the adjourned meeting, a quorum is not present

within 30 minutes after the time appointed for the meeting, the

shareholders present or their proxies are a quorum.

27. Chairperson – (1) If the directors have elected a

chairperson of the directors, and the chairperson of the directors

is present at a meeting of shareholders, he or she must chair the

meeting.

(2) If no chairperson of the directors has been elected or if,

at any meeting of shareholders, the chairperson of the directors

is not present within 15 minutes of the time appointed for the

commencement of the meeting, the shareholders present may

choose 1 of their number to be chairperson of the meeting.

28. Voting – (1) In the case of a meeting of shareholders

held under clause 25(a), unless a poll is demanded, voting at the

meeting will take place by whichever of the following methods

is determined by the chairperson of the meeting:

(a) voting by voice; or

(b) voting by show of hands.

(2) In the case of a meeting of shareholders held under

clause 25(b), unless a poll is demanded, voting at the meeting

will take place by shareholders signifying individually their

assent or dissent by voice.

(3) A declaration by the chairperson of the meeting that a

resolution is carried by the requisite majority is conclusive

evidence of that fact unless a poll is demanded under sub-clause

(4).

(4) At a meeting of shareholders a poll may be demanded

by:

(a) not fewer than 5 shareholders having the right to

vote on the question at the meeting; or


than 10% of the total voting rights of all


shareholders having the right to vote on the

question at the meeting.

(5) A poll may be demanded either before or after a vote is

taken on a resolution.

(6) If a poll is taken, votes must be counted according to the

votes attached to the shares of each shareholder present and

voting.

(7) The chairperson of a shareholders’ meeting is not

entitled to a casting vote.

29. Votes of joint shareholders – If 2 or more persons are

registered as the holder of a share, the vote of the person named

first in the share register and voting on a matter must be

accepted to the exclusion of the votes of the other joint holders.

30. Proxies – (1) A shareholder may exercise the right to

vote either by being present in person or by proxy.

(2) A proxy for a shareholder is entitled to attend and

participate in a meeting of shareholders as if the proxy were the

shareholder.

(3) A proxy must be appointed by notice in writing signed

by the shareholder.

(4) The notice must state whether the appointment is for a

particular meeting, or for a specified term.

(5) No proxy is effective in relation to a meeting unless a

copy of the notice of appointment is given to the company at

least 24 hours before the start of the meeting.

31. Corporations may act by representatives – (1) A

corporation that is a shareholder may appoint a representative to

attend a meeting of shareholders on its behalf by notice in

writing signed by a director or secretary of the corporation.



32. Minutes – (1) The directors must ensure that minutes

are kept of all proceedings at meetings of shareholders.

(2) Minutes that have been signed correct by the chairperson

of the meeting are prima facie evidence of the proceedings at

the meeting.


Division 6 – MISCELLANEOUS

33. Annual meetings and special meetings of

shareholders – (1) Subject to sub-clause (3) and clause 34(3),

the directors must call an annual meeting of the company to be

held:

(a) once in each calendar year; and

(b) not later than 5 months after the balance date of the

company (or, if the time for completing the

financial statements of the company has been

extended under clause 70(1)(a), not later than 20

working days after the financial statements are

required to be completed); and

(c) not later than 15 months after the previous annual

meeting.

(2) The meeting must be held on the date on which it is

called to be held.

(3) The company need not hold its first annual meeting in

the calendar year of its incorporation, but must hold that

meeting within 18 months of its incorporation.


issue:





be cast on that issue.

34. Written resolutions of shareholders – (1) A resolution

in writing signed by shareholders, who together hold not less

than 75% of the votes entitled to be cast on that resolution at a

meeting of shareholders, is as valid as if it had been passed at a

meeting of those shareholders.

(2) Any such resolution may consist of several documents

(including fax or other similar means of communication) in like

form each signed or assented to by 1 or more shareholders.

(3) The company need not hold an annual meeting if

anything required to be done at that meeting (by resolution or

otherwise) is done by resolution in accordance with sub-clause

(1).



under sub-clause (1), the company must send a copy of the

resolution to any shareholder who did not sign it.

(5) A resolution may be signed under sub-clause (1) without

any prior notice being given to shareholders.

35. Voting in interest groups – If the company proposes to

take action that affects the rights attached to shares within the

meaning of section 54 of the Act, the action may not be taken

unless it is approved by a special resolution of each interest

group, as defined in section 54(3) of the Act.

36. Shareholders entitled to receive distributions – (1)

The shareholders who are entitled to receive distributions are:

(a) if the directors fix a date for this purpose, those

shareholders whose names are registered in the

share register on that date:

(b) if the directors do not fix a date for this purpose,

those shareholders whose names are registered in

the share register on the day on which the

distribution is approved.

(2) A date fixed under sub-clause (1) must not precede by

more than 20 working days the date on which the proposed

action will be taken.

37. Shareholders entitled to exercise pre-emptive rights –

The shareholders who are entitled to pre-emptive rights to

acquire shares under clause 12 are those shareholders whose

names are registered in the share register on the day on which

notice is given to the company by the selling shareholder under

clause 13.

38. Shareholders entitled to attend and vote at meetings

– (1) The shareholders who are entitled to receive notice of a

meeting of shareholders are:



share register on that date;



the share register at the close of business on the


day immediately preceding the day on which the

notice is given.

(2) A date fixed under sub-clause (1)(a) must not precede by

more than 30 working days the date on which the meeting is to

be held.

(3) Before a meeting of shareholders, the company may

prepare a list of shareholders entitled to receive notice of the

meeting, arranged in alphabetical order, and showing the

number of shares held by each shareholder:

(a) if a date has been fixed under sub-clause (1)(a), as

at that date; or

(b) if no such date has been fixed, as at the close of

business on the day immediately preceding the

day on which the notice is given.

(4) A person named in a list prepared under sub-clause (3) is

entitled to attend the meeting and vote in respect of the shares

shown opposite his or her name in person or by proxy, except to

the extent that:

(a) that person has, since the date on which the

shareholders entitled to receive notice of the

meeting were determined, transferred any of his

or her shares to some other person; and

(b) the transferee of those shares has been registered as

the holder of those shares, and has requested

before the commencement of the meeting that his

or her name be entered on the list prepared under

sub-clause (3).

(5) A shareholder may on 2 working days’ notice examine

any list prepared under sub-clause (3) during normal business

hours at the registered office of the company.

39. Distributions to shareholders – (1) The company must

not pay a dividend or make any other distribution to

shareholders unless there are reasonable grounds for believing

that, after that distribution is made:

(a) the company will be able to pay its debts as they

become due in the normal course of business;

and

(b) the value of the company’s assets will not be less

than the value of its liabilities.


(2) Subject to sub-clause (1) and to the terms of issue of any

shares, the company may pay a dividend to shareholders:

(a) of the same amount in respect of each share of the

same class, if the payment of the dividend is

authorised by the directors; or

(b) on any other basis, with the prior approval of all

shareholders.

(3) A distribution made in breach of sub-clause (1) or (2)

may be recovered by the company from the recipients or from

the persons approving the distribution, under section 29 of the

Act.

40. Company may acquire its own shares and provide

financial assistance – (1) The company may agree to acquire

its own shares from a shareholder:

(a) with the prior approval of all shareholders; and

(b) subject to the solvency test in clause 39(1).

(2) If the company acquires its own shares, those shares are

taken to be cancelled immediately on acquisition.

(3) The company may give financial assistance to a person

for the purpose of, or in connection with, the purchase of a

share issued or to be issued by the company, whether directly or

indirectly, only if:

(a) after providing the assistance, the company will

satisfy the solvency test in clause 39(1); and

(b) all shareholders have approved the giving of the

assistance.

41. Annual report to shareholders – (1) Subject to sub-

clause (2), the directors of the company must, within 20

working days after the date on which the company is required to

complete its financial statements under section 130:



that date; and


(2) The directors are only required to prepare an annual

report in respect of an accounting period if a shareholder has

given written notice to the company before the end of that

accounting period requiring such a report to be prepared.


(3) If the directors are not required to prepare an annual

report in respect of an accounting period, they must send a

notice to each shareholder to that effect within the period

referred to in sub-clause (1).

(4) An annual report for the company must:



period that comply with section 130; and

(c) if an auditor’s report is required in relation to the

financial statements included in the report,

include that auditor’s report; and






(e) contain any other information that may be required

by regulations made under the Act; and




42. Deemed approval by all shareholders for certain

purposes – For the purposes of clauses 6, 7(2), and 40(1) and

(3), a decision is deemed to have been approved by all

shareholders if:

(a) notice of the proposed decision has been given to

all shareholders in accordance with clause 75;

and

(b) no shareholder has responded within 10 working

days objecting to that decision; and

(c) shareholders entitled to cast not less than 75% of

the votes in relation to a resolution to alter these

rules have responded within 10 working days

approving that decision.

PART 3

DIRECTORS


43. Appointment and removal of directors – (1) The

shareholders may by ordinary resolution fix the number of

directors of the company.

(2) A director may be appointed or removed by ordinary

resolution passed at a meeting called for the purpose, or by a

written resolution in accordance with clause 34(1).

(3) A director vacates office if he or she:

(a) is removed from office in accordance with sub-

clause (2); or

(b) resigns in accordance with clause 44; or


section 85 of the Act; or

(d) dies.

44. Resignation of director – (1) A director may resign by

delivering a signed written notice of resignation to the

registered office of the company.

(2) Subject to sub-clauses (3) and (4), a notice of resignation

is effective when it is received at the registered office, or at any

later time specified in the notice.

(3) If the company has only 1 director, that director may not

resign:

(a) until that director has called a meeting of

shareholders to receive notice of the resignation;

or




(4) A notice of resignation given by the sole director of the



(a) the time and date for which the meeting of

shareholders is called under sub-clause (3)(a); or




45. Notice of change in directors – (1) The company must

ensure that notice in the prescribed form of the following is

delivered to the Registrar:


(a) a change in the directors of the company, whether

as the result of a director ceasing to hold office

or the appointment of a new director, or both;

(b) a change in the name or the residential address of a

director of the company.

(2) In the case of the appointment of a new director, a

consent by that person to act as a director, in the prescribed

form, must also be delivered to the Registrar.

46. Powers and duties of directors – (1) Subject to section

50 of the Act (which relates to major transactions) the business

and affairs of the company must be managed by, or under the

direction or supervision of, the directors.

(2) The directors have all the powers necessary for

managing, and for directing and supervising the management

of, the business and affairs of the company.

(3) The directors may delegate any of their powers to a

committee of directors, or to a director or employee.

(4) The directors must monitor, by means of reasonable

methods properly used, the exercise of powers by any delegate.

(5) The provisions of these rules relating to proceedings of

the directors also apply to proceedings of any committee of

directors, except to the extent the directors determine otherwise.

(6) The directors have the duties set out in the Act, and, in

particular:

(a) each director must act in good faith and in a manner

that the director believes to be in the interests of

the company; and

(b) a director must not act, or agree to the company

acting, in a manner that contravenes the Act or

these rules.

47. Standard of care of directors – A director of the

company, when exercising powers or performing duties as a

director, must exercise the care, diligence, and skill that a

reasonable person would exercise in the same circumstances

taking into account, but without limitation:







insolvency – (1) A director of the company must call a meeting

of directors within 10 working days to consider whether the

directors should appoint an administrator or liquidator, in

accordance with section 71 of the Act, if the director:


as they fall due; or



unable to pay its debts as they fall due.

(2) At a meeting called under section 71 of the Act the

directors must consider whether to:

(a) appoint an administrator or liquidator; or

(b) continue to carry on the business of the company.

49. Interested directors – (1) A director must not exercise

any power as a director in circumstances where that director is

directly or indirectly materially interested in the exercise of that

power unless:

(a) the Act expressly authorises the director to exercise

the relevant power despite such an interest; or




(i) these rules expressly authorise the director

to exercise the relevant power despite

such an interest; or

(ii) the matter in question has been approved by

shareholders under section 51 of the Act,

following disclosure of the nature and

extent of the director’s interest to all

shareholders who are not otherwise aware

of those matters.

(2) A director who is directly or indirectly materially

interested in any transaction or proposed transaction must,

within 10 working days of becoming aware of that interest,

disclose the nature and extent of that interest in writing:

(a) if there is at least 1 other director who is not

directly or indirectly materially interested in the


transaction or proposed transaction, to the

directors of the company; or

(b) if paragraph (a) does not apply, to all shareholders

other than the director.

(3) A director may give a general disclosure in writing to all

other shareholders that the director is a director or employee or

shareholder of another company, or is otherwise associated with

another company or another person. That general disclosure is a

sufficient disclosure of the director’s interest in any transaction

entered into with that other company or person for the purposes

of sub-clause (2).

(4) A transaction entered into by the company in which a

director is directly or indirectly materially interested is voidable

at the election of the company in accordance with section 111 of

the Act.

(5) A transaction entered into by the company as the result

of action taken by a director in breach of section 65, 66, or 67 of

the Act is voidable at the option of the company in accordance

with section 112 of the Act.

50. Use and disclosure of company information – (1) A

director of the company who has information in his or her









the director takes that action, and that action -

(i) is approved by all shareholders under


(ii) is authorised by any contract of employment

entered into between that director and the

company, the relevant terms of which

have been approved by shareholders by

ordinary resolution.

(2) No director may vote on a resolution to approve such

terms in relation to himself or herself.


51. Indemnities and insurance for directors or employees

– (1) Subject to section 74 of the Act, the company may provide

an indemnity or purchase insurance for a director of the

company or of a related company with the approval of:

(a) shareholders by ordinary resolution.; or

(b) all shareholders under section 51 of the Act.

(2) No director may vote on a resolution concerning an

indemnity or insurance to be provided for the director.

(3) In this clause:



67 of the Act by virtue of section 73 of the Act;

and

(b) a former director,




52. Remuneration of directors – (1) Directors may receive

remuneration and other benefits from the company with the

approval of:

(a) shareholders by ordinary resolution.; or

(b) all shareholders under section 51 of the Act.

(2) No director may vote on a resolution concerning

remuneration or benefits to be received by the director.

53. Procedure at meetings of directors – (1) Clauses 54 to

60 set out the procedure to be followed at meetings of directors.

(2) A meeting of directors may determine its own procedure

to the extent that it is not governed by these rules.

54. Chairperson – (1) The directors may elect 1 of their

number as chairperson of directors and may determine the

period for which the chairperson is to hold office.

(2) If no chairperson is elected, or if at a meeting of the

directors the chairperson is not present within 5 minutes after

the time appointed for the commencement of the meeting, the

directors present may choose 1 of their number to be



55. Notice of meeting – (1) A director or, if requested by a

director to do so, an employee of the company, may convene a

meeting of directors by giving notice in accordance with this

clause.

(2) Not less than 24 hours’ notice of a meeting of directors

must be given to any director who is in Samoa, or who can

readily be contacted outside Samoa.

(3) An irregularity in the notice of a meeting is waived if all

directors entitled to receive notice of the meeting attend the

meeting without protest as to the irregularity, or if all directors

entitled to receive notice of the meeting agree to the waiver.

56. Methods of holding meetings – A meeting of directors

may be held either:

(a) by a number of the directors who constitute a




communication by which all directors



meeting.

57. Quorum – (1) A quorum for a meeting of directors is a

majority of the directors.

(2) No business may be transacted at a meeting of directors

if a quorum is not present.

58. Voting – (1) A director has 1 vote.

(2) The chairperson has a casting vote.

(3) A resolution of the directors is passed if it is agreed to by

all directors present without dissent, or if a majority of the votes

cast on it are in favour of it.

(4) A director present at a meeting of directors is presumed

to have agreed to, and to have voted in favour of, a resolution of

the directors unless he or she expressly dissents from or votes

against the resolution at the meeting.

59. Minutes – The directors must ensure that minutes are

kept of all proceedings at meetings of the directors.


60. Unanimous resolution – (1) A resolution in writing

signed or assented to by all directors is as valid and effective as

if it had been passed at a meeting of the directors duly convened

and held.



form each signed or assented to by 1 or more directors.

(3) A copy of any such resolution must be entered in the

minute book of the directors’ proceedings.

61. Managing director and other executive directors –

(1) The directors may, appoint a director as managing director

for such period and on such terms as they think fit.

(2) Subject to the terms of a managing director’s

appointment, the directors may at any time cancel the

appointment of a director as managing director.

(3) A director who holds office as managing director ceases

to hold office as managing director if he or she ceases to be a


62. Delegation to managing director – (1) The directors

may delegate to the managing director, subject to any

conditions or restrictions that they consider appropriate, any of

their powers that can be lawfully delegated.

(2) Any such delegation may at any time be withdrawn or

varied by the directors.

(3) The delegation of a power of the directors to the

managing director does not prevent the exercise of the power by

the directors, unless the terms of the delegation expressly

provide otherwise.

63. Remuneration of managing director and directors –

(1) Subject to shareholder approval under clause 52, the

managing director, or a director (other than the managing

director) who is employed by the company, may be paid such

remuneration as he or she may agree with the directors.

(2) The remuneration may be by way of salary, commission,

participation in profits or any combination of these methods, or

any other method of fixing remuneration.

PART 4


COMPANY RECORDS

64. Company records – (1) The company must keep all the

following documents at its registered office or at some other

place notice of which has been given to the Registrar in

accordance with section 119 of the Act:


(b) minutes of all meetings and resolutions of

shareholders within the last 7 years;


and directors’ committees within the last 7 years:

(d) the full names and residential and postal addresses

of the current directors;

(e) copies of all written communications to all

shareholders or all holders of the same class of

shares during the last 7 years, including annual

reports made under section 56 of the Act;

(f) copies of all financial statements required to be

completed under section 130 of the Act for the

last 7 completed accounting periods of the

company;

(g) the accounting records required by section 129 of

the Act for the current accounting period and for

the last 7 completed accounting periods of the

company;


(2) The references in sub-clause (1)(b), (c), and (e) to 7

years and the references in sub-clause (1)(f) and (g) to 7

completed accounting periods include such lesser periods as the

Registrar may approve by notice in writing to the company, in

accordance with section 117(2) of the Act.

65. Form of records – (1) The records of the company must

be kept:


(b) in a form or in a manner that allows the documents

and information that comprise the records to be

readily accessible so as to be usable for


written form.



to:



66. Access to records – (1) The directors of the company

are entitled to access to the company’s records in accordance


(2) A shareholder of the company is entitled:

(a) to inspect the documents referred to in section 121

of the Act, in the manner specified in section 123

of the Act; and

(b) to require copies of or extracts from any document

that he or she may inspect within 5 working days

of making a request in writing for the copy or

extract, on payment of any reasonable copying

and administration fee prescribed by the

company.

(3) The fee may be determined by any director, subject to

any directions from the directors.

67. Documents to be sent to Registrar – In addition to any

annual return required under section 124 of the Act, the

company must send all the following documents to the

Registrar under the Act:

(a) notice of the adoption of new rules by the company,

or the alteration of the rules of the company,

under section 14 of the Act;

(b) notice of a change in the registered office or postal

address of the company under section 18 of the

Act;


section 26 of the Act;


shares, under section 31 of the Act;

(e) notice of the redemption of a share, under section

35 of the Act;



or postal address of a director, under section 88

of the Act;



of the Act altering or adding to the rules of a

company;





(i) documents requested by the Registrar under section

312 of the Act.

68. Documents to be sent to shareholders – In addition to

any annual report required under section 56 of the Act, the

company must send all the following documents to shareholders

under the Act:


31(4) of the Act applies;





(d) any written statement by an auditor under section

136 of the Act;

(e) any report by an auditor under section 138 of the

Act.

PART 5

ACCOUNTS AND AUDIT


the company must cause accounting records to be kept that:


company; and



accuracy; and



130 of the Act; and




(2) Without limiting clause 68, the accounting records must

contain:




and


goods:


relevant invoices;


financial year together with records of any

stock takings during the year; and



relevant invoices.

(3) If the company sells goods or provides services for cash

in the ordinary course of carrying on a retail business:


transaction for the purposes of sub-clause (2);

and




comply with sub-clause (2) in respect of those

transactions.


(a) in a form permitted under clause 65; and


place permitted under section 119 of the Act.


directors must ensure that:


company, or with the approval of shareholders

by special resolution, within an extended period

not exceeding 7 months after the balance date of

the company, financial statements that comply

with sub-clause (2) are completed in relation to

the company and that balance date; and




paragraph (a), those financial statements are sent

to all shareholders. This requirement may be

satisfied by sending the financial statements to

shareholders in an annual report, in accordance


(2) The financial statements of the company must:


they relate; and


the Act; and




(3) The following periods must not exceed 15 months:

(a) the period between the date of incorporation of the

company and its first balance date:

(b) the period between any 2 balance dates of the

company.

(4) In this clause, “financial statements”, in relation to the

company and a balance date, means:

(a) a statement of financial position for the entity as at

the balance date; and

(b) for a company—

(i) trading for profit, a statement of financial

performance for the company in relation

to the accounting period ending at the

balance date; and

(ii) not trading for profit, an income and

expenditure statement for the company in

relation to the accounting period ending at


(c) if required by regulations made under the Act, a



balance date; and

(d) such other financial statements in relation to the



regulations made under the Act; and




statements.

71. Appointment of auditor – (1) If required to do so under

sub-clause (2), the company must appoint an auditor who is

qualified to hold that office under section 135 of the Act:

(a) to audit the financial statements of the company in

respect of an accounting period; and

(b) to hold office until those financial statements have

been audited in accordance with the Act or until

he or she ceases to hold office under sub-clause

(3).

(2) The company must appoint an auditor within 30 working

days if:

(a) a shareholder or shareholders holding shares that

together carry the right to receive more than 20%

of distributions made by the company give

written notice to the company before the end of

an accounting period requiring the financial

statements of the company for that period to be

audited; or

(b) a vacancy in the office of auditor arises before the

financial statements in respect of a period for

which an audit is required have been audited.

(3) An auditor ceases to hold office if he or she:

(a) resigns by delivering a written notice of resignation




(b) is replaced as auditor by an ordinary resolution



accordance with section 133 of the Act; or


company under section 135; or

(d) dies; or

(e) is adjudged to be mentally defective under the

Mental Health Act 2007; or

(f) ceases to hold office under sub-clause (5); or

(g) is removed by all shareholders under sub-clause (6).


(4) An auditor may be appointed:


(b) if the office of auditor is vacant, by the directors. If

an auditor is appointed by the directors, the

directors must within 10 working days give

notice of the appointment to all shareholders.

(5) If the company is required to appoint an auditor in

respect of an accounting period but is not required to do so in

respect of a subsequent accounting period:

(a) the audit of the financial statements of the company

for the accounting period in respect of which an

audit is required must be completed in

accordance with this section; and

(b) the directors may give notice to all shareholders

within 4 months of the commencement of a

subsequent accounting period that the company

is no longer required to appoint an auditor, and

that the auditor will cease to hold office unless a

notice is given by shareholders under sub-clause

(2)(a) by a date specified in the notice, which

must be not less than 30 working days from the

date on which the notice is given; and

(c) if a notice has been given under paragraph (b), and

no notice under sub-clause (2)(a) is received by

the company by the date specified in that notice,

the auditor ceases to hold office on the later of—

(i) the date specified in the notice; or

(ii) the date on which the audit of the

financial statements of the

company for the previous

accounting period is completed.

(6) Despite the other provisions of this clause, all

shareholders may agree in writing:

(a) to dispense with an audit for any accounting period;

and

(b) to remove the auditor of the company.

(7) The fees payable to the auditor must be agreed between

the auditor and the directors.

72. Auditor’s attendance at shareholders’ meeting – The

directors must ensure that an auditor of the company:



the company; and







PART 6

LIQUIDATION AND REMOVAL FROM REGISTER

73. Resolution to appoint liquidator –(1) The shareholders

may resolve to liquidate the company by special resolution.

(2) The directors may resolve to liquidate the company at a

meeting called under section 71 of the Act, if they consider that

the company is unable to meet its debts as they become due in

the normal course of business.

74. Distribution of surplus assets – (1) The surplus assets

of the company available for distribution to shareholders after

all creditors of the company have been paid must be distributed

in proportion to the number of shares held by each shareholder,

subject to the terms of issue of any shares.

(2) The liquidator may, with the approval of a special

resolution, distribute the surplus assets of the company among

the shareholders in kind. For this purpose the liquidator may set

such value as he or she considers fair on any property to be

divided, and may determine how the division will be carried out

as between the shareholders or different classes of shareholders.

PART 7

MISCELLANEOUS

75. Service of documents on shareholders – (1) A notice,

statement, report, accounts, or other document to be sent to a

shareholder who is a natural person may be:



(c) faxed to a fax number used by that person.



to be sent to a shareholder that is a company or an overseas

company may be sent by any of the methods of serving

documents referred to in section 345 or 347 of the Act, as the

case may be.

76. Interpretation – (1) In these rules, “Act” means the

Companies Act 2001.

(2) Unless the context otherwise requires, any term or

expression that is defined in the Act or any regulations made

under the Act and used, but not defined, in these rules has the

same meaning as in the Act or the regulations.

SCHEDULE 3

(Sections3(B), 14(1)(B), 15(3) and 334(3),

and Clause 1 of Schedule 1)

MODEL RULES FOR SINGLE SHAREHOLDER

COMPANY

CONTENTS

PART 1

GENERAL PROVISIONS

1. Name of company

2. Private company with 1

shareholder

3. Rules

PART 2

SHARES AND

SHAREHOLDER

4. Shares

5. Company to keep share

register

6. Form and location of share

register

7. Status of registered

shareholder



10. Shareholder decisions and

exercise of shareholder

powers

11. Distributions to shareholders


own shares and provide



shareholders

PART 3

DIRECTORS

14. Appointment and removal of

directors

15. Powers and duties of

directors




18. Interested directors


company Information


20. Indemnities and insurance



22. Procedure at meetings of

directors

23. Chairperson

24. Notice of meeting

25. Methods of holding meetings

26. Quorum

27. Voting

28. Minutes

29. Unanimous resolution

30. Managing director and other

executive directors

PART 4

COMPANY RECORDS

32. Form of records

33. Access to records

34. Documents to be sent to

Registrar


shareholder

PART 5

ACCOUNTS AND AUDIT


kept


prepared



shareholder’s meeting

PART 6

LIQUIDATION AND

REMOVAL FROM

REGISTER

40. Resolution to appoint

liquidator

41. Distribution of surplus assets

PART 7

MISCELLANEOUS


shareholder

43. Interpretation

__________

PART 1

GENERAL PROVISIONS




(2) The name of the company may be changed in

accordance with section 11 of the Act only with the prior

approval of the shareholder.

2. Private company with 1 shareholder – (1) The

company is a private company.

(2) The company must not offer any of its shares or other

securities to the public.

(3) The company has 1 shareholder.


(4) These rules are designed for a company with 1

shareholder: if the company proposes to increase the number of

shareholders, it must first adopt new rules.

(5) The company must not have more than 1 shareholder.

(6) If a share transfer is presented to the company for entry

on the share register that would result in a breach of this

restriction, the directors must decline to register the transfer.



14(2) of the Act.



they constituted a contract:

(i) between the company and the

shareholder; and

(ii) between the company and each

director; and

(b) the shareholder and the directors of the company

have the rights, powers, duties, and obligations

set out in these rules.

PART 2

SHARES AND SHAREHOLDER

4. Shares – (1) At the time of registration under the Act

the company has the number of shares specified in the

application for registration or re-registration, as the case may

be.

(2) If the company was first registered under Part 2 of the

Act, the company must immediately after its registration issue

to the person named in the application for registration as the

shareholder the number of shares specified in the application as

being the number of shares to be issued to that person.

(3) With the prior approval of the shareholder, the company

may:

(a) issue shares to the shareholder; and

(b) issue more than 1 class of shares.






out in section 23 of the Act, the notice must be accompanied by

a document setting out the terms of issue of the shares.

(6) The shares of the company are, subject to clause 8(4)

and their terms of issue, transferable by entry in the share

register in accordance with clause 8(1) to (3).




(a) the names, alphabetically arranged, and the latest








(iii) transfer of shares by or to, each shareholder

within the last 7 years, and in relation to

the transfer, the name of the person to or

from whom the shares were transferred.




share register.







7. Status of registered shareholder – (1) The company


entitled to:






share.

(2) If a shareholder dies, that shareholder’s legal



(3) A person who becomes entitled to a share as a












(3) Subject to sub-clause (4), the company must,

immediately on receipt of a properly executed share transfer,

enter the name of the transferee in the share register as holder of

the shares transferred.




but unpaid.

(5) If the directors resolve to refuse to register a transfer

under subclause (4), they must give notice of the refusal to the


9. Share certificates – (1) The shareholder may apply to

the company for a share certificate relating to some or all of the


(2) On receipt of an application for a share certificate, the

company must, within 20 working days after receiving the

application:



as owned by the shareholder into separate

parcels; 1 parcel being the shares to which the


share certificate relates, and the other parcel

being any remaining shares; and


stating—



and



relates.




accompanied by:




the directors.






10. Shareholder decisions and exercise of shareholder

powers – A resolution in writing signed by the shareholder is as

valid as if it had been passed at a meeting of shareholders.

11. Distributions to shareholders – (1) The payment of a

dividend or the making of any other distribution must be

approved by the shareholder.

(2) The company must not make a distribution to the

shareholder unless there are reasonable grounds for believing




and




(3) A distribution made in breach of subclause (2) may be

recovered by the company from the shareholder, under section

29 of the Act.


financial assistance – (1) The company may agree to acquire

its own shares from the shareholder, subject to the solvency test

in clause 11(2).


taken to be cancelled immediately on acquisition.

(3) The company may give financial assistance to the

shareholder for the purpose of, or in connection with, the

purchase of a share issued or to be issued by the company,

whether directly or indirectly, only if after providing the

assistance the company will satisfy the solvency test in clause

11(2).

13. Annual report to shareholders – The directors of the

company are not required to prepare an annual report in respect

of any accounting period, unless requested to do so by the

shareholder by notice in writing.

PART 3

DIRECTORS

14. Appointment and removal of directors – (1) The

shareholder may fix the number of directors of the company by

notice in writing to the company.

(2) A director may be appointed or removed by the

shareholder by notice in writing to the company.

(3) A director vacates office if he or she:

(a) is removed from office in accordance with sub-

clause (2); or

(b) resigns under sub-clause (4); or



(d) dies.

(4) A director may resign by delivering a signed written

notice of resignation to the registered office of the company and

to the shareholder. Subject to sub-clause (5), the notice is


effective when it is received at the registered office, or at any

later time specified in the notice.


resign until that director has given not less than 10 working

days written notice of the resignation to the shareholder. A

notice of resignation given by the sole director of the company

does not take effect, despite its terms, until the earlier of:

(a) the expiry of 10 working days after written notice

of the resignation has been given to the

shareholder; or

(b) the appointment of another director of the company.

(6) The company must ensure that notice in the prescribed

form of all the following is delivered to the Registrar:









15. Powers and duties of directors – (1) The business and

affairs of the company must be managed by, or under the

direction or supervision of, the directors subject to:

(a) section 50 of the Act, which relates to major

transactions; and

(b) any directions given to the board in writing by the

shareholder.




(3) The directors may delegate to a committee of directors,

or to a director or employee, any of their powers. The directors

must monitor, by means of reasonable methods properly used,

the exercise of powers by any delegate.

(4) These rules relating to proceedings of the directors also

apply to proceedings of any committee of directors, except to

the extent the directors determine otherwise.


particular:




the company; and



these rules.





















directors must consider whether to:

(a) appoint an administrator or liquidator; or

(b) continue to carry on the business of the company.


any power as a director in circumstances if that director is


power unless the matter in question has been approved by the

shareholder.




the Act.














(c) to the shareholder; or

(d) if there are reasonable grounds for believing that


the director takes that action, and that action—

(i) is approved by the shareholder; or

(ii) is authorised by any contract of employment

entered into between that director and the

company, the relevant terms of which

have been approved by the shareholder.




company or of a related company with the approval of the

shareholder.

(2) In sub-clause (1):




and







approval of the shareholder.




(2) A meeting of directors may determine its own procedure

to the extent that it is not governed by these rules.

23. Chairperson – (1) The shareholder may appoint a

director as chairperson of directors and may determine the


(2) If no chairperson is appointed, or if at a meeting of the







meeting of directors by giving notice under this clause.









may be held either:








meeting.






27. Voting – (1) Any director has 1 vote.


(3) A resolution of the board is passed if it is agreed to by












and held.







(1) The shareholder may appoint a director as managing

director for such period and on such terms as the shareholder

thinks fit.

(2) The remuneration of the managing director must be

approved by the shareholder.


appointment, the shareholder may at any time cancel the





(5) The directors may, with the prior approval of the

shareholder, delegate to the managing director, subject to any




(6) A delegation may at any time be withdrawn or varied by

the directors. The delegation of a power of the directors to the



provide otherwise.

(7) A director other than the managing director who is

employed by the company may be paid such remuneration as

may be approved by the shareholder.

PART 4

COMPANY RECORDS

31 Company records – (1) The company must keep all the
















completed under section 130 for the last 7


(g) the accounting records required by section 129 for

the current accounting period and for the last 7










be kept:






written form.


to:




are entitled to access to the company’s records under section

120 of the Act.

(2) The shareholder of the company is entitled to access to

the company’s records as if that shareholder were a director.

34. Documents to be sent to Registrar – In addition to the






under section 14 of the Act;

(b) notice of a change in the registered office of the

company, under section 18 of the Act;






35 of the Act;




of the Act;



company;






(i) documents requested by the Registrar under the

Act.

35. Documents to be sent to shareholder – In addition to

any annual report required under section 56 of the Act, the


shareholder under the Act:

(a) financial statements required to be sent under


(b) any written statement by an auditor under section

136 of the Act;

(c) any report by an auditor under section 138 of the

Act.

PART 5

ACCOUNTS AND AUDIT




company; and



accuracy; and



130 of the Act; and



(2) Without limiting sub-clause (1), the accounting records

must contain:




and


goods—









relevant invoices.





and





transactions.


(a) in a form permitted under clause 32; and




directors of any company must ensure that within 4 months

after the balance date of the company or, if the shareholder

agrees in writing, within an extended period not exceeding 7

months after the balance date of the company, financial

statements that comply with sub-clause (2) are:

(a) completed in relation to the company and that

balance date; and

(b) given to the shareholder.



they relate; and


the Act; and




(3) The period between:


(a) the date of incorporation of the company and its

first balance date; or

(b) any 2 balance dates of the company, must not

exceed 15 months.

(4) In this clause, financial statements, in relation to the




(b) in the case of—

(i) a company trading for profit, a statement of

financial performance for the company in



(ii) a company not trading for profit, an income

and expenditure statement for the

company in relation to the accounting

period ending at the balance date; and




balance date; and







statements.

38. Appointment of auditor – (1) The shareholder may, by

notice in writing to the company, appoint an auditor who is

qualified to hold that office under section 135 of the Act to:

(a) hold office as auditor for the period specified in the

notice; and

(b) audit the financial statements of the company.

(2) The shareholder may remove an auditor by notice in

writing to the company and to that auditor.

39. Auditor’s attendance at shareholder’s meeting – The

directors of the company must ensure that an auditor of the

company:



the company; and







PART 6


40. Resolution to appoint liquidator – (1) The shareholder

may resolve to liquidate the company by special resolution.





(3) The directors must give not less than 5 working days’

notice to the shareholder of any meeting called under section 71

of the Act, and must permit the shareholder to attend and speak

at that meeting.




to the shareholder.

(2) The liquidator may, with the approval of the shareholder,

distribute the surplus assets of the company to the shareholder

in kind.

PART 7

MISCELLANEOUS

42. Service of documents on shareholder – (1) A notice,




(b) sent by any other method approved in writing by

that shareholder.






case may be.


Companies Act 2001.





SCHEDULE 4

(Sections 3(b), 14(1)(b), 15(2)(3) and 334(3))

MODEL RULES FOR PUBLIC COMPANIES

CONTENTS

PART 1

GENERAL PROVISIONS

1. Name of company

2. Public company

3. Rules

PART 2

SHARES AND

SHAREHOLDERS


PROVISIONS

4. Number of shares

5. Rights attaching to shares

6. Issue of shares

7. Process for issuing shares

8. Transferability of shares

Division 2 – SHARE

REGISTER

9. Company to keep share

register

10. Form and location of share

register

11. Status of registered

shareholders

Division 3 – TRANSFER OF

SHARES AND SHARE

CERTIFICATES



Division 4 – MEETINGS OF

SHAREHOLDERS

14. Meetings of shareholders

15. Notice of meetings


17. Quorum

18. Chairperson

19. Voting

20. Votes of joint shareholders

21. Proxies

22. Corporations may act by

representatives


23. Postal votes

24. Duty of person authorised to

receive and count postal

votes

25. Duty of chairperson

concerning postal Votes

26. Minutes

Division 5 –

MISCELLANEOUS

27. Annual meetings and special

meetings of Shareholders

28. Written resolutions of

shareholders

29. Voting in interest groups

30. Shareholders entitled to

receive dividends

31. Notice of meetings and

voting

32. Distributions to shareholders


own shares and provide



shareholders

Division 6 – COMPULSORY

ACQUISITIONS

35. Compulsory acquisition of

minority holdings below

10%

36. Price for voting share

37. Notice under clause 35:

general requirements

38. Requirements for price for

voting share determined

under clause 36(1)(a)

39. Requirements for price for

voting share determined

under clause 36(1)(b)

40. Notice of price determined

by arbitrator

41. Requirements on transfer

date

Division 7 – EXIT RIGHTS

42. Application of exit rights

43. Acquirer to give notice to

company

44. Consideration for remaining

shares

45. Independent report

46. Notice to holders of

remaining shares

47. Rights of holders of

remaining shares

48. When voting rights not to be

exercised

PART 3

DIRECTORS

49. Number of directors

50. Appointment and removal of

directors

51. Term of office

52. When director vacates office

53. Resignation of director

54. Casual vacancies

55. Notice of changes in

directors

56 Powers and duties of

directors




59. Interested directors


company information

61. Indemnities and insurance



63. Disclosure of interests by

directors

64. Procedure at meetings of

directors

65. Chairperson



68. Quorum

69. Voting

70. Minutes

71. Unanimous resolution

72. Managing director


73. Delegation to managing

director

74. Remuneration of managing

director and executive

directors

PART 4

COMPANY RECORDS

75. Company records

76. Form of records

77. Access to records


Registrar


shareholders

PART 5

ACCOUNTS AND AUDIT


kept


prepared




PART 6

LIQUIDATION AND

REMOVAL FROM

REGISTER

84. Resolution to appoint

liquidator

85. Distribution of surplus assets

PART 7

MISCELLANEOUS


shareholders

87. Interpretation

__________

PART 1

GENERAL PROVISIONS




(2) The name of the company may be changed in

accordance with section 10 of the Act with the prior approval of

the directors.

2. Public company – The company is a public company.



14(2) of the Act.



they constituted a contract—

(i) between the company and its shareholders;

and


(ii) between the company and each director; and

(b) the shareholders and directors of the company have


in these rules.

PART 2

SHARES AND SHAREHOLDERS

Division 1 – GENERAL PROVISIONS

4. Number of shares – At the time of registration under

the Act the company has the number of shares specified in the

application for registration or re-registration, as the case may

be.

5 Rights attaching to shares – Subject to clause 7(4),

each share carries all the following rights:



resolution to—

(i) appoint or remove a director or auditor;





(vi) approve re-registration of a public company

as a private company, or of a private

company as a public company;

(vii) put the company into liquidation;




company;



6. Issue of shares – If the company was first registered

under Part 2 of the Act, the company must immediately after its

registration issue to any person named in the application for

registration as a shareholder the number of shares specified in


the application as being the number of shares to be issued to

that person or those persons.

7. Process for issuing shares – (1) The directors may

issue shares:

(a) pursuant to an offer made to all shareholders

proportionally, that if accepted by all

shareholders would not affect relative voting or

distribution rights, on such terms as the directors

think fit (including issuing shares without

consideration, or instead of dividends). The

shareholders must have a reasonable opportunity

to consider and respond to the offer; or

(b) to shareholders or any other persons for a

consideration determined by the directors. The

directors must use reasonable endeavours to

obtain the best price reasonably obtainable for

those shares.

(2) The directors may issue more than 1 class of shares. In

particular, shares may be issued that:

(a) are redeemable; or


or income; or


or

(d) do not confer voting rights.





out in clause 5, the notice must be accompanied by a document


8. Transferability of shares – The shares of the company

are, subject to clause 7(4) and their terms of issue, transferable

by entry in the share register under clauses 12(1) to (3).

Division 2 – SHARE REGISTER













(iii) transfer of shares by or to, each shareholder

within the last 7 years, and in relation to

the transfer, the name of the person to or

from whom the shares were transferred.




share register.







11. Status of registered shareholders – (1) The company


entitled to:





share.

(2) If a joint holder of a share dies, the remaining holders

must be treated by the company as the holders of that share.

(3) If the sole holder of a share dies, that shareholder’s legal




(4) A person who becomes entitled to a share as a






Division 3 – TRANSFER OF SHARES AND SHARE

CERTIFICATES







(3) Subject to sub-clause (4), the company must,

immediately on receipt of a properly executed share transfer,

enter the name of the transferee in the share register as holder of

the shares transferred.




but unpaid.

(5) If the directors resolve to refuse to register a transfer for

this reason, they must give notice of the refusal to the





(2) On receipt of an application for a share certificate under

sub-clause (1), the company must, within 20 working days after

receiving the application:









stating—



and



relates.




accompanied by:




the directors.






Division 4 – MEETINGS OF SHAREHOLDERS

14. Meetings of shareholders – (1) Clauses 15 to 27 set out

the procedure to be followed at and in relation to meetings of

shareholders.

(2) A meeting of shareholders may determine its own

procedure to the extent that it is not governed by these rules.

15. Notice of meetings – (1) Written notice of the time and

place of a meeting of shareholders must be given to any

shareholder entitled to receive notice of the meeting and to any

director and any auditor of the company not less than 15

working days before the meeting.

(2) The notice must set out:

(a) the nature of the business to be transacted at the

meeting in sufficient detail to enable a

shareholder to form a reasoned judgment in

relation to it; and


(b) the text of any special resolution to be submitted to

the meeting.

(3) An irregularity in a notice of a meeting is waived if all

the shareholders entitled to attend and vote at the meeting attend

the meeting without protest as to the irregularity, or if all such

shareholders agree to the waiver.

(4) An accidental omission to give notice of a meeting to, or

the failure to receive notice of a meeting by, a shareholder does

not invalidate the proceedings at that meeting.

(5) If a meeting of shareholders is adjourned for less than 30

working days it is not necessary to give notice of the time and

place of the adjourned meeting other than by announcement at

the meeting that is adjourned.

16. Methods of holding meetings – A meeting of

shareholders may be held either:

(a) by a number of shareholders, who constitute a




communication by which all shareholders



meeting.

17. Quorum – (1) Subject to sub-clause (3), no business

may be transacted at a meeting of shareholders if a quorum is

not present.

(2) A quorum for a meeting of shareholders is present if 5 or

more shareholders or their proxies are present who are between

them able to exercise a majority of the votes to be cast on the

business to be transacted by the meeting.



same day in the following week at the same time and place, or

to such other date, time and place as the directors may appoint.

(4) If, at the adjourned meeting, a quorum is not present

within 30 minutes after the time appointed for the meeting, the

shareholders present or their proxies are a quorum.


18. Chairperson – (1) If the directors have elected a

chairperson of the directors, and the chairperson of the directors

is present at a meeting of shareholders, he or she must chair the

meeting.

(2) If no chairperson of the directors has been elected or if,

at any meeting of shareholders, the chairperson of the directors

is not present within 15 minutes of the time appointed for the

commencement of the meeting, the shareholders present may

choose 1 of their number to be chairperson of the meeting.

19. Voting – (1) In the case of a meeting of shareholders

held under clause 16(a), unless a poll is demanded, voting at the

meeting will take place by whichever of the following methods

is determined by the chairperson of the meeting:

(a) voting by voice:

(b) voting by show of hands.

(2) In the case of a meeting of shareholders held under

clause 16(b), unless a poll is demanded, voting at the meeting

will take place by shareholders signifying individually their

assent or dissent by voice.

(3) A declaration by the chairperson of the meeting that a

resolution is carried by the requisite majority is conclusive

evidence of that fact unless a poll is demanded in accordance

with sub-clause (4).

(4) At a meeting of shareholders a poll may be demanded

by:

(a) not fewer than 5 shareholders having the right to

vote on the question at the meeting; or


than 10% of the total voting rights of all

shareholders having the right to vote on the

question at the meeting.

(5) A poll may be demanded either before or after a vote is

taken on a resolution.

(6) If a poll is taken, votes must be counted according to the

votes attached to the shares of each shareholder present and

voting.

(7) The chairperson of a shareholders’ meeting is not

entitled to a casting vote.

20. Votes of joint shareholders – If 2 or more persons are

registered as the holder of a share, the vote of the person named


first in the share register and voting on a matter must be

accepted to the exclusion of the votes of the other joint holders.

21. Proxies – (1) A shareholder may exercise the right to

vote either by being present in person or by proxy.

(2) A proxy for a shareholder is entitled to attend and

participate in a meeting of shareholders as if the proxy were the

shareholder.


by the shareholder. The notice must state whether the

appointment is for a particular meeting, or for a specified term.


copy of the notice of appointment is given to the company at

least 24 hours before the start of the meeting.

22. Corporations may act by representatives – (1) A

corporation that is a shareholder may appoint a representative to

attend a meeting of shareholders on its behalf by notice in

writing signed by a director or secretary of the corporation.



23. Postal votes – (1) A shareholder may exercise the right

to vote at a meeting by casting a postal vote in accordance with

this clause.

(2) The notice of a meeting at which shareholders are

entitled to cast a postal vote must state the name of the person

authorised by the directors to receive and count postal votes at

that meeting.

(3) A shareholder may cast a postal vote on all or any of the

matters to be voted on at the meeting by sending a notice of the

manner in which his or her shares are to be voted to a person

authorised to receive and count postal votes at that meeting. The

notice must reach that person not less than 48 hours before the

start of the meeting.

(4) A shareholder who has submitted a postal vote on any

resolution:

(a) may attend and speak at the meeting; and

(b) must not vote on that resolution in person at the

meeting.


24. Duty of person authorised to receive and count postal

votes – (1) If no person has been authorised to receive and

count postal votes at a meeting, or if no person is named as

being so authorised in the notice of the meeting, any director is

taken to be so authorised.

(2) It is the duty of a person authorised to receive and count

postal votes at a meeting:

(a) to collect together all postal votes received by him

or her or by the company; and

(b) in relation to each resolution to be voted on at the

meeting, to count—

(i) the number of shareholders voting in favour

of the resolution and the number of votes

cast by each shareholder in favour of the

resolution; and

(ii) the number of shareholders voting against

the resolution, and the number of votes

cast by each shareholder against the

resolution; and

(c) to sign a certificate that he or she has carried out the

duties set out in paragraphs (a) and (b) and which

sets out the results of the counts required by

paragraph (b); and

(d) to ensure that the certificate required by paragraph

(c) is presented to the chairperson of the meeting.

25. Duty of chairperson concerning postal votes – (1) If a

vote is taken at a meeting on a resolution on which postal votes

have been cast, the chairperson of the meeting must:

(a) on a vote by show of hands, count each shareholder

who has submitted a postal vote for or against

the resolution;

(b) on a poll, count the votes cast by each shareholder

who has submitted a postal vote for or against

the resolution.

(2) The chairperson of a meeting must call for a poll on a

resolution on which he or she holds sufficient postal votes that

he or she believes that if a poll is taken the result may differ

from that obtained on a show of hands.


(3) The chairperson of a meeting must ensure that a

certificate of postal votes held by him or her is annexed to the

minutes of the meeting.

26. Minutes – (1) The directors must ensure that minutes

are kept of all proceedings at meetings of shareholders.

(2) Minutes that have been signed correct by the chairperson

of the meeting are prima facie evidence of the proceedings at

the meeting.

Division 5 – MISCELLANEOUS

27. Annual meetings and special meetings of

shareholders – (1) Subject to sub-clause (3) and clause 28(3),

the directors must call an annual meeting of the company to be

held:

(a) once in each calendar year; and

(b) not later than 5 months after the balance date of the

company; and

(c) not later than 15 months after the previous annual

meeting.

(2) The meeting must be held on the date on which it is

called to be held.

(3) The company need not hold its first annual meeting in

the calendar year of its incorporation, but must hold that

meeting within 18 months of its incorporation.


issue:





be cast on that issue.

28. Written resolutions of shareholders – (1) A resolution

in writing signed by shareholders, who together hold not less

than 75% of the votes entitled to be cast on that resolution at a

meeting of shareholders, is as valid as if it had been passed at a

meeting of those shareholders.




form each signed or assented to by 1 or more shareholders.

(3) The company need not hold an annual meeting if

anything required to be done at that meeting (by resolution or

otherwise) is done by resolution in accordance with sub-clause

(1).


under sub-clause (1), the company must send a copy of the

resolution to any shareholder who did not sign it.

(5) A resolution may be signed under sub-clause (1) without

any prior notice being given to shareholders.

29. Voting in interest groups – If the company proposes to

take action that affects the rights attached to shares within the

meaning of section 54 of the Act, the action may not be taken

unless it is approved by a special resolution of each interest

group, as defined in section 54(3) of the Act.

30. Shareholders entitled to receive dividends – (1) The

shareholders who are entitled to receive dividends are:






the share register on the day on which the

dividend is approved.


more than 20 working days the date on which the proposed

action will be taken.

31. Notice of meetings and voting – (1) The shareholders

who are entitled to receive notice of a meeting of shareholders

are:






the share register at the close of business on the


day immediately preceding the day on which the

notice is given.


more than 30 working days the date on which the meeting is to

be held.

(3) Before a meeting of shareholders, the company may

prepare a list of shareholders entitled to receive notice of the

meeting, arranged in alphabetical order, and showing the

number of shares held by each shareholder:

(a) if a date has been fixed under sub-clause (1)(a), as

at that date; or

(b) if no such date has been fixed, as at the close of

business on the day immediately preceding the

day on which the notice is given.

(4) A person named in a list prepared under sub-clause (3) is

entitled to attend the meeting and vote in respect of the shares

shown opposite his or her name in person or by proxy, except to

the extent that:

(a) that person has, since the date on which the

shareholders entitled to receive notice of the

meeting were determined, transferred any of his

or her shares to some other person; and

(b) the transferee of those shares has been registered as

the holder of those shares, and has requested

before the commencement of the meeting that his

or her name be entered on the list prepared under

sub-clause (3).

(5) A shareholder may on 2 working days’ notice examine

any list prepared under sub-clause (3) during normal business

hours at the registered office of the company.

32. Distributions to shareholders – (1) The company must

not pay a dividend or make any other distribution to

shareholders unless there are reasonable grounds for believing




and




(2) Subject to sub-clause (1) and to the terms of issue of any

shares, the company may pay a dividend to shareholders -

(a) of the same amount in respect of each share of the

same class, if the payment of the dividend is

authorised by the directors; or

(b) on any other basis, with the prior approval of all

shareholders.

(3) A distribution made in breach of sub-clause (1) or (2)

may be recovered by the company from the recipients or from

the persons approving the distribution, in accordance with

section 29 of the Act.

(4) No dividend or other distribution bears interest against

the company unless the applicable terms of issue of a share

expressly provide otherwise.

(5) All dividends and other distributions unclaimed for 1

year after the due date for payment may be invested or

otherwise made use of by the directors for the benefit of the

company until claimed.

(6) The company is entitled to mingle the unclaimed

distribution with other money of the company and is not

required to hold it or to regard it as being impressed with any

trust but, subject to compliance with the solvency test, must pay

the distribution to the person producing evidence of entitlement

to receive it.


financial assistance – (1) Subject to the solvency test, the

company may agree to acquire its own shares from a

shareholder:

(a) pursuant to an offer to acquire shares made to all

holders of shares of the same class that would, if

accepted by all persons to whom the offer is

made, leave unaffected relative voting and

distribution rights; or

(b) on any other basis, with the prior approval of

shareholders by special resolution.


taken to be cancelled immediately on acquisition.(3) The

company may give financial assistance to a person for the

purpose of, or in connection with, the purchase of a share


issued or to be issued by the company, whether directly or

indirectly, only if:

(a) the company gives the assistance in the normal

course of its business and on usual terms and

conditions; or

(b) the giving of the assistance is authorised by the

directors or by all shareholders under section 51

of the Act, and there are reasonable grounds for

believing that, after providing the assistance, the

company will satisfy the solvency test.

34. Annual report to shareholders – (1) The directors of

the company must, within 5 months after the balance date of the

company:



that date; and


(2) Any annual report for the company must:



period that comply with section 130 of the Act;

and

(c) include the auditor’s report required under section

138; and






(e) contain such other information as may be required

by regulations made under the Act; and




Division 6 – COMPULSORY ACQUISITIONS

35. Compulsory acquisition of minority holdings below

10% – (1) A shareholder who holds 90% of the voting shares of

the company (majority shareholder) may give a notice to the


other holders of voting shares (minority shareholders) in

accordance with this clause, requiring the minority shareholders

to sell their voting shares to the majority shareholder.

(2) The majority shareholder must also give the notice to the

company, and give public notice of the fact that such a notice

has been given.

(3) A notice may be given under sub-clause (1) by a

majority shareholder at any time within 6 months after that

majority shareholder first becomes interested in not less than

90% of the voting shares of the company.

36. Price for voting share – (1) The majority shareholder

must pay a price for each voting share that is:

(a) equal to the highest price paid for a voting share by

that majority shareholder in an arm’s length sale

and purchase of such shares during the 6-month

period ending on the date on which the majority

shareholder first became interested in not less

than 90% of the voting shares; or

(b) if the majority shareholder so elects, a price to be

fixed by an independent arbitrator.

(2) The majority shareholder must ask the directors of the

company to nominate an independent arbitrator for this purpose.

(3) If the directors fail to do so within 10 working days of

receiving such a request, the majority shareholder may

nominate the arbitrator.

37. Notice under clause 35: general requirements – (1) A

notice given under clause 35 must specify:

(a) the name of the majority shareholder; and

(b) the date on which the majority shareholder first

became interested in not less than 90% of the

voting shares of the company; and

(c) if the price to be paid for each voting share has been

determined under clause 36(1)(a), that price,

which must be certified by the majority

shareholder as meeting the requirements of

clause 36(1)(a); and

(d) if the price to be paid for each voting share is to be

fixed by an arbitrator under clause 36(1)(b), the


name of the arbitrator and the date on which and

place at which the arbitration is to be held; and

(e) the rights of minority shareholders under clause 39.

(2) The date referred to in sub-clause (1)(d) must not be less

than 60 working days from the date on which the notice is given

to minority shareholders.

38. Requirements for price for voting share determined

under clause 36(1)(a) – If the price to be paid for each voting

share has been determined under clause 36(1)(a), a notice given

under clause 35 must also:

(a) specify a date not less than 20 working days from

the date of the notice on which the price will be

paid, and the shares will be acquired by the

majority shareholder (transfer date); and

(b) advise the shareholder that no payment will be

received by the shareholder until any share

certificate that has been issued in respect of the

voting shares has been delivered to the company;

and

(c) require the shareholder to specify the manner in

which payment for the voting shares is to be

made to that shareholder; and

(d) advise shareholders that payment can be made by

cheque to be collected from the company at a

specified address, or posted to a postal address

specified by the shareholder, and may provide

for other payment options.

39. Requirements for price for voting share determined

under clause 36(1)(b) – (1) If the price to be paid for each

voting share is to be determined under clause 36(1)(b), and if

any minority shareholder considers that the arbitrator is not

suitably qualified to value the shares, or is not independent, the

minority shareholder may give notice to the company within 10

working days requiring the company to apply to the Court for

appointment of another person as arbitrator.

(2) If a notice under sub-clause (1) is received, the company

must immediately apply to the Court for the appointment of an

arbitrator.


(3) If a notice is given under sub-clause (1), or if for any

other reason the arbitration does not proceed on the date and at

the place specified in the notice, not less than 40 working days’

notice of the altered date and place must be given to each

minority shareholder.

(4) Each minority shareholder is entitled to attend the

arbitration and to be heard, in person or by a representative

(who may, but need not, be a lawyer or a public accountant).

(5) The arbitrator must expeditiously determine a fair and

reasonable price per share for the shares to be acquired.

(6) The price must not include any discount or premium to

reflect the size of the parcels of shares to be acquired, or the

circumstances of the acquisition.

(7) The costs of the arbitration must be paid by the majority

shareholder.

40. Notice of determination of price by arbitrator –

Within 10 working days of the determination by the arbitrator,

the company must give a notice to each minority shareholder

that:

(a) advises the shareholder of the price that has been

determined by the arbitrator; and

(b) specifies a date not less than 10 working days and

not more than 20 working days from the date of

the notice on which the price will be paid, and

the shares will be acquired by the majority

shareholder (transfer date); and

(c) advises the shareholder that no payment will be

received by the shareholder until any share

certificate that has been issued in respect of the

voting shares has been delivered to the company;

and

(d) requires the shareholder to specify the manner in

which payment for the voting shares is to be

made to that shareholder; and

(e) advises the shareholders that payment can be made

by cheque to be collected from the company at a

specified address, or posted to a postal address

specified by the shareholder, and may provide

for other payment options.


41. Requirements on transfer date – (1) On the transfer

date:

(a) the majority shareholder must pay the full amount

of the price for all voting shares held by minority

shareholders to the company, to be held on trust

by the company for the benefit of those

shareholders. The payment must be made in

cleared funds; and

(b) all voting shares held by minority shareholders are

taken to be transferred to the majority

shareholder on payment to the company in

accordance with paragraph (a), and the company

must register the majority shareholder as the

holder of those shares despite any outstanding

share certificates in respect of those shares.

(2) Subject to sub-clause (5), within 3 working days of the

transfer date the company must pay each minority shareholder

the price for that shareholder’s voting shares, in the manner

specified by that shareholder.

(3) If the shareholder has specified that a cheque will be

collected from the company by that shareholder, the cheque

must be held ready for collection from that date.

(4) If the company fails to make a payment, or to make it

available for collection, the company must pay interest to the

shareholder from the due date to the date on which the payment

is made, or is made available for collection, at the rate of 15%

per annum accruing daily and compounding monthly.

(5) If a share certificate has been issued in respect of voting

shares held by a minority shareholder, no payment may be made

to that minority shareholder until the minority shareholder

delivers to the company:

(a) the share certificate; or



the directors.

Division 7 – EXIT RIGHTS

42. Application of exit rights – (1) Subject to sub-clause

(2), this clause and clauses 43 to 48 apply to a shareholder

(acquirer) who:


(a) acquires shares in the company or otherwise

becomes interested in shares in the company

(acquisition); and

(b) before the acquisition, was interested in less than

40% of the voting shares of the company; and

(c) following the acquisition, is interested in 40% or

more of the voting shares of the company.

(2) A person may be exempted from the application of this

clause and clauses 43 to 48, either with or without conditions,

by a special resolution of holders of voting shares other than:

(a) voting shares in which that person is interested; and

(b) voting shares in which any other person is

interested, where that other person is interested

in not less than 40% of the company’s voting

shares.

43. Acquirer to give notice to company – An acquirer

must, within 10 working days of first becoming a shareholder to

whom this clause applies, give notice to the company:

(a) advising the company that the acquirer is a

shareholder to whom this clause applies; and

(b) identifying the names of the holders of all voting

shares in which the acquirer is interested, and the

number of shares held by each of them in which

the acquirer is interested; and

(c) offering to purchase all voting shares in which the

acquirer is not interested (remaining shares) on

the terms set out in clause 44.

44. Consideration for remaining shares – A notice given

under clause 43 must be signed by the acquirer or, if the

acquirer is a corporation, by a director of that corporation, and

must:

(a) specify the highest price paid for any voting share

in the company by the acquirer, or by any person

holding shares in which the acquirer is

interested, from the date 6 months before the

date on which the acquirer first became a person

to whom this clause applies up to the date of the

notice; and

(b) if any shares in which the acquirer is interested

were acquired during this period for a non-cash


consideration, describe that consideration and

state an assessment of the cash value to which

that consideration corresponds; and

(c) specify the consideration offered by the acquirer for

each remaining share, which may, but need not,

be a cash consideration (consideration); and

(d) specify the date on which the acquirer will provide

the consideration for any remaining shares in

respect of which the offer is accepted, which

must be not less than 20 working days nor more

than 40 working days from the date on which the

notice is given to the company (transfer date);

and

(e) specify the rights of the holders of remaining shares

under clause 47.

45. Independent report – A notice given under clause 43

must be accompanied by a report from an independent

appropriately qualified person previously approved by the

company, confirming that the consideration offered is a fair and

reasonable consideration for a share, without any discount or

premium to reflect the size of the parcels of shares to be

acquired or the circumstances of the acquisition.

46. Notice to holders of remaining shares – (1) Within 10

working days of receiving a notice under clause 43, the

company must forward the notice to all holders of remaining

shares.

(2) The notice under sub-clause (1) may, but need not, be

accompanied by:

(a) additional information provided by the directors in

relation to the offer:

(b) a recommendation by the directors as to whether or

not the offer should be accepted.

(3) The company must also immediately give public notice

of the notice given to shareholders.

47. Rights of holders of remaining shares – (1) A

shareholder to whom a notice is given under clause 46:

(a) is not required to accept the offer:


(b) may accept the offer by notice in writing to the

company within 20 working days of the date on

which the notice was given to the shareholder.

(2) If a shareholder gives notice accepting an offer in

accordance with sub-clause (1)(b), there is deemed to be a

contract between the acquirer and the shareholder for the

purchase by the acquirer of the remaining shares held by that

shareholder:

(a) on the transfer date; and

(b) for the consideration.

48. When voting rights not to be exercised – (1) If a

shareholder to whom this clause applies fails to give the notice

required under clause 43 within the time specified in that clause,

no voting rights may be exercised in respect of any shares in

which that acquirer is interested until that notice has been given.

(2) If a person who is not a shareholder becomes interested

in 40% or more of the voting shares of the company, no voting

rights may be exercised in respect of any voting shares in which

that person is interested unless that person:

(a) is exempted by a special resolution under clause

42(2); or

(b) undertakes to the company to make an offer as if

that person were an acquirer, and complies with

that undertaking.

PART 3

DIRECTORS

49. Number of directors – (1) The minimum number of

directors is 2.

(2) The maximum number of directors is 10.

(3) The shareholders may by ordinary resolution vary the

minimum or maximum number of directors of the company.

50. Appointment and removal of directors – A director

may be appointed or removed by ordinary resolution passed at a

meeting called for the purpose, or by a written resolution in

accordance with clause 28(1).


51. Term of office – (1) The resolution appointing a

director may specify the period for which the director is to hold

office.

(2) On the expiry of any period specified in this manner, the

director ceases to hold office unless reappointed.

52. When director vacates office – A director vacates

office if he or she:

(a) is removed from office under clause 50; or

(b) ceases to hold office under clause 51; or

(c) resigns in under clause 53; or

(d) becomes disqualified from being a director under


(e) dies; or

(f) is absent from 3 consecutive meetings of the

directors without leave being granted by a

resolution of the directors, and the directors

resolve that that director has vacated office.

53. Resignation of director – (1) A director may resign by

delivering a signed written notice of resignation to the

registered office of the company.

(2) Subject to sub-clauses (3) and (4), the notice is effective

when it is received at the registered office, or at any later time

specified in the notice.


resign:

(a) until that director has called a meeting of share-

holders to receive notice of the resignation; or




(4) A notice of resignation given by the sole director of the



(a) the time and date for which the meeting of

shareholders is called under sub-clause (3)(a); or





54. Casual vacancies – The directors may appoint any

person to be a director to fill a casual vacancy until the next

annual meeting of the company.

55. Notice of changes in directors – (1) The company must

ensure that notice in the prescribed form of the following is

delivered to the Registrar:









56. Powers and duties of directors – (1) Subject to section

50 of the Act (which relates to major transactions) the business

and affairs of the company must be managed by, or under the

direction or supervision of, the directors.




(3) The directors may delegate any of their powers to a

committee of directors, or to a director or employee.

(4) The directors must monitor, by means of reasonable

methods properly used, the exercise of powers by any delegate.

(5) The provisions of these rules relating to proceedings of

the directors also apply to proceedings of any committee of

directors, except to the extent the directors determine otherwise.


particular:



the company; and



these rules.






















directors must consider whether to appoint an administrator or

liquidator, or to continue to carry on the business of the

company.


any power as a director in circumstances where that director is


power unless:

(a) the Act expressly authorises the director to exercise

the relevant power despite such an interest; or




(i) these rules expressly authorise the

director to exercise the relevant

power despite such an interest,

and the interest has been

disclosed in accordance with

clause 63(4); or

(ii) the matter in question has been

approved by shareholders under

section 51 of the Act, following


disclosure of the nature and extent

of the director’s interest to all

shareholders who are not

otherwise aware of those matters.




the Act.















the director takes that action, and that action—

(i) is approved by all shareholders

under section 51 of the Act; or

(ii) is authorised by any contract of

employment entered into between

that director and the company, the

relevant terms of which have been

disclosed in the interests register

referred to in clause 63.




company or of a related company with the approval of:

(a) the directors; but no director may vote on a

resolution concerning an indemnity or insurance

to be provided for him or her; or


(b) shareholders by ordinary resolution; but no director

may vote on a resolution concerning an

indemnity or insurance to be provided for him or

her; or

(c) all shareholders under section 51 of the Act.

(2) In sub-clause (1):




and



whether before or after the liability arises;




approval of:

(a) the directors; but no director may vote on a

resolution concerning remuneration or other

benefits to be provided for him or her; or

(b) shareholders by ordinary resolution; but no director

may vote on a resolution concerning

remuneration or benefits to be received by him

or her; or

(c) all shareholders under section 51 of the Act.

63. Disclosure of interests by directors – (1) The company

must:

(a) maintain an interests register; and

(b) permit any director or shareholder to inspect the

interests register as if sections 120 and 121 of the

Act applied to the interests register.

(2) The annual report of the company under section 56 of

the Act in respect of any accounting period must contain all

entries made in the interests register in the course of that

accounting period.

(3) The directors must enter in the interests register details

of any:

(a) contract of employment to which clause 60(c)

applies; and


(b) indemnity or insurance provided for a director

under clause 61; and

(c) details of any remuneration or other benefits

provided to directors under clause 62; and

(d) disclosure by a director under sub-clause (4) or (5).

(4) A director who is in any way directly or indirectly

materially interested in a transaction or proposed transaction

with the company must within 10 working days of becoming

aware of that interest:

(a) disclose that interest in writing to the directors; and

(b) ensure that details of that disclosure are entered in

the interests register.

(5) A director may disclose to the other directors, and enter

in the interests register, a general disclosure that the director is a

director or employee or shareholder of another company, or is

otherwise associated with another company or another person.

(6) Disclosure under sub-clause (5) is disclosure of the

director’s interest in any transaction entered into with that other

company or person for the purposes of sub-clause (4).



(2) A meeting of directors may determine its own

procedure, to the extent that it is not governed by these rules.

65. Chairperson – (1) The directors may elect 1 of their

number as chairperson of directors and may determine the


(2) If no chairperson is elected, or if at a meeting of the







meeting of directors by giving notice in accordance with this

clause.










may be held either:








meeting.





69. Voting – (1) A director has 1 vote.


(3) A resolution of the directors is passed if it is agreed to by












and held.








(1) The directors may, appoint a director as managing director

for such period and on such terms as they think fit.


appointment, the directors may at any time cancel the





73. Delegation to managing director – (1) The directors

may delegate to the managing director, subject to any



(2) A delegation may at any time be withdrawn or varied by

the directors.

(3) The delegation of a power of the directors to the



provide otherwise.

74. Remuneration of managing director and executive

directors – (1) The managing director may be paid such

remuneration as he or she may agree with the directors.

(2) A director (other than the managing director) who is

employed by the company may be paid such remuneration as

may be agreed between that director and the other directors.

(3) The remuneration referred to in sub-clauses (1) and (2)

may be by way of salary, commission, participation in profits or

any combination of these methods, or any other method of

fixing remuneration.

PART 4

COMPANY RECORDS

75. Company records – (1) The company must keep all the





(a) the rules of the company:












completed under section 130 of the Act for the

last 7 completed accounting periods of the

company;

(g) the accounting records required by section 129 of

the Act for the current accounting period and for

the last 7 completed accounting periods of the

company;







(3) The interests register required to be kept under clause 63

must be:

(a) kept at the same place as the written

communications to shareholders referred to in

clause 75(1)(e); and

(b) kept in a form that complies with clause 76; and

(c) made available to shareholders in the same manner

as records to which clause 76(2) applies.


be kept:







written form.

(2) The directors must ensure that adequate measures exist:

(a) to prevent the records being falsified; and

(b) to detect any falsification of them.


are entitled to access to the company’s records in accordance


(2) A shareholder of the company is entitled:

(a) to inspect the documents referred to in section 121

of the Act, in the manner specified in section 123

of the Act; and

(b) to require copies of or extracts from any document

that he or she may inspect within 5 working days

of making a request in writing for the copy or

extract, on payment of any reasonable copying

and administration fee prescribed by the

company.

(3) The fee may be determined by any director, subject to

any directions from the directors.

78. Documents to be sent to Registrar – In addition to the






under section 14;

(b) notice of a change in the registered office of the

company, under section 18 of the Act;






35 of the Act;




of the Act;




company;





(i) documents requested by the Registrar under the

Act.

79. Documents to be sent to shareholders – In addition to

the annual report required under section 56 of the Act, the

company must send all the following documents to shareholders

under the Act:


31(4) applies;





(d) any written statement by an auditor under section

136 of the Act;

(e) the report by the auditor under section 138.

PART 5

ACCOUNTS AND AUDIT




company; and



accuracy; and



130 of the Act; and



(2) Without limiting sub-clause (1), the accounting records

must contain:





and


goods—








relevant invoices.





and





transactions.


(a) a form permitted under clause 76; and




directors must ensure that:


company, financial statements that comply with

Sub-clause (2) are completed in relation to the

company and that balance date; and



paragraph (a),–

those financial statements are sent to all shareholders. This

requirement may be satisfied by sending the financial


statements to shareholders in an annual report, in accordance




they relate; and


the Act; and




(3) The period between:

(a) the date of incorporation of the company and its

first balance date; or

(b) any 2 balance dates of the company,–

must not exceed 15 months.

(4) In this clause, “financial statements”, in relation to the




(b) in the case of—

(i) a company trading for profit, a statement of

financial performance for the company in



(ii) a company not trading for profit, an income

and expenditure statement for the

company in relation to the accounting

period ending at the balance date; and




balance date; and







statements.


82. Appointment of auditor – (1) The company must

appoint an auditor who is qualified to hold that office under

section 135 of the Act:

(a) to audit the financial statements of the company in

respect of an accounting period; and

(b) to hold office until those financial statements have

been audited in accordance with the Act or until

he or she ceases to hold office.

(2) The company must appoint an auditor within 30 working

days in the event of a vacancy in the office of auditor.

(3) An auditor ceases to hold office if he or she:

(a) resigns by delivering a written notice of resignation




(b) is replaced as auditor by an ordinary resolution



accordance with section 133 of the Act; or


company; or

(d) is adjudged to be mentally defective under the

Mental Health Act 2007; or

(e) dies.

(4) An auditor may be appointed:


(b) if the office of auditor is vacant, by the directors. If

an auditor is appointed by the directors, the

directors must within 10 working days give

notice of the appointment to all shareholders.

(5) The fees payable to the auditor must be agreed between

the auditor and the directors.

83. Auditor’s attendance at shareholders’ meeting – The

directors must ensure that an auditor of the company:


the company; and



meetings or resolutions of shareholders; and





PART 6


84. Resolution to appoint liquidator – (1) The

shareholders may resolve to liquidate the company by special

resolution.








in proportion to the number of shares held by each shareholder,

subject to the terms of issue of any shares.

(2) The liquidator may, with the approval of a special

resolution, distribute the surplus assets of the company among

the shareholders in kind.

(3) For the purposes of sub-clause (2), the liquidator may:

(a) set such value as he or she considers fair on any

property to be divided; and

(b) determine how the division will be carried out as

between the shareholders or different classes of

shareholders.

PART 7

MISCELLANEOUS

86. Service of documents on shareholders – (1) A notice,





(c) faxed to a fax number used by that person for the

transmission of documents.






case may be.


Companies Act 2001.





(3) For the purposes of these rules:

(a) voting share means a share that confers on its

holder the right to vote on a resolution to amend

the rules;

(b) the percentage of voting shares held by any person

is treated as equal to the percentage of votes that

that person is entitled to cast on such a

resolution.

(4) For the purposes of these rules, a person is interested in a

voting share if that person:

(a) is a beneficial owner of the share; or

(b) has the power to exercise any right to vote attached

to the share; or

(c) has the power to control the exercise of any right to

vote attached to the share; or

(d) has the power to acquire or dispose of the share; or

(e) has the power to control the acquisition or

disposition of the share by another person; or

(f) under, or by virtue of, any trust, agreement,

arrangement or understanding relating to the

share (whether or not that person is a party to it,

and whether or not it is legally enforceable) may,

at any time, have the power to—

(i) exercise any right to vote attached to the

share; or

(ii) control the exercise of any right to vote

attached to the share; or

(iii) acquire or dispose of, the share; or


(iv) control the acquisition or disposition of the

share by another person.

(5) A person who has, or may have, a power referred to in

sub-clause (4)(b) to (f) is interested in a share regardless of

whether the power is:

(a) express or implied;

(b) direct or indirect

(c) legally enforceable or not:

(d) related to a particular share or not:

(e) subject to restraint or restriction or is capable of

being made subject to restraint or restriction:

(f) exercisable presently or in the future:

(g) exercisable only on the fulfilment of a condition:

(h) exercisable alone or jointly with another person or

persons.

SCHEDULE 5

(Sections 3(d) and 55)

MINORITY BUY-OUT PROCEDURE

CONTENTS

1. Shareholder may give notice

requiring purchase of shares

2. Directors’ duties on receipt

of notice requiring purchase

3. Directors to nominate and

give notice of price for

shares

4. Objection to share price

5. Nominated price payable if

no objection

6. Expert determination of price

7. Purchase of shares by third

party

8. Inability of company to pay

purchase price

__________

1. Shareholder may give notice requiring purchase of

shares – A shareholder of a company who is entitled to require

the company to purchase shares by virtue of section 55 may:

(a) within 10 working days of the passing of the

resolution at a meeting of shareholders; or

(b) if the resolution was passed under section 52, within

10 working days of the date on which notice of

the passing of the resolution is given to the

shareholder,–


give a written notice to the company requiring the company to

purchase those shares

2. Directors’ duties on receipt of notice requiring

purchase – Within 20 working days of receiving a notice under

clause 1, the directors must:

(a) agree to the purchase of the shares by the company;

or

(b) arrange for some other person to agree to purchase

the shares; or

(c) arrange, before taking the action concerned, for the

resolution to be rescinded or decide in the

appropriate manner not to take the action

concerned, as the case may be; and

(d) give written notice to the shareholder of the

directors’ decision.

3. Directors to nominate and give notice of price for

shares – (1) If the directors agree under clause 2(a) to the

purchase of the shares by the company, the directors must, on

giving notice under that clause or within 5 working days after

giving that notice:

(a) nominate a date on which the shares will be

acquired by the company (purchase date), which

must not be less than 10 working days or more

than 20 working days from the date of giving

notice to the shareholder; and

(b) nominate a fair and reasonable price for the shares

to be acquired; and

(c) give notice of the price to the holder of those

shares.

(2) On the purchase date:

(a) the shares are taken to be transferred to the

company; and

(b) the company is liable to pay for the shares under

this clause, subject to section 28.

(3) For the purposes of this Schedule, a price for a share is a

fair and reasonable price if it is a fair and reasonable price for a

share in the company as at the purchase date, disregarding:

(a) any premium or discount in respect of the size of

parcels of shares to be acquired;


(b) the fact that the shares are being acquired under

section 55;

(c) the effect or likely effect on the value of the

company and its shares of the company

approving the resolution the approval of which

entitled the shareholder to require the company

to purchase his or her shares.

4. Objection to share price – (1) A shareholder who

considers that the price nominated by the directors is not fair or

reasonable must, within 10 working days, give notice of

objection to the company.

(2) If, within 10 working days of giving notice to a

shareholder under clause 3(1), an objection to the price has been

received by the company, the company must:

(a) refer the question of what is a fair and reasonable

price to determination by an expert in accordance

with clause 6; and

(b) on the purchase date, pay a provisional price in

respect of each share equal to the price

nominated by the directors.

5. Nominated price payable if no objection – If, within

10 working days of giving notice to a shareholder under clause

3(1), no objection to the price has been received by the

company, the price to be paid for the shares is the nominated

price.

6. Expert determination of price – (1) If the company is

required to refer the price for shares to expert determination in

accordance with clause 4(2)(a), the company must within 10

working days nominate an independent person with appropriate

expertise as the expert to determine the price, and give notice of

that appointment to the shareholder.

(2) The shareholder may, within 10 working days of

receiving the notice referred to in sub-clause (1), give notice to

the company that he or she objects to the expert nominated by

the company, on the grounds that that person:

(a) is not independent; or

(b) does not have the appropriate expertise.


(3) If, within 10 working days of receipt of notice by a

shareholder under sub-clause (1), no objection to the expert has

been received by the company, the expert must expeditiously

determine a fair and reasonable price for the shares to be

purchased.

(4) If, within 10 working days of receipt of notice by a

shareholder under sub-clause (1), an objection to the expert has

been received by the company, the company must immediately

apply to the Court for the appointment of an expert. The Court

may appoint the person nominated by the company, or any

person nominated by the shareholder, or such other independent

person with appropriate expertise as the Court may think fit.

The expert appointed by the Court must immediately on being

appointed proceed to expeditiously determine a fair and

reasonable price for the shares to be purchased.

(5) If the price determined by the expert:

(a) exceeds the provisional price, the company must,

subject to section 28, immediately pay the

balance owing to the shareholder;

(b) is less than the provisional price paid, the company

may recover the excess paid from the

shareholder.

(6) The expert may award interest on any balance payable or

excess to be repaid under sub-clause (5) at such rate as he or she

thinks fit.

(7) The determination by the expert is final and is made by

the expert as an expert, and not as an arbitrator.

7. Purchase of shares by third party – (1) Clauses 3 to 6

apply to the purchase of shares by a person with whom the

company has entered into an arrangement for purchase in

accordance with clause 2(b) subject to such modifications as

may be necessary, and, in particular, as if references in that

section to the directors and the company were references to that

person.

(2) A holder of shares that are to be purchased under the

arrangement is indemnified by the company in respect of loss

suffered by reason of the failure by the person who has agreed

to purchase the shares to purchase them at the price nominated

or fixed by arbitration, as the case may be.


8 Inability of company to pay purchase price – Section

33 of the Act applies to the purchase of shares under this

Schedule as if there were a contract between the shareholder

and the company for the purchase of shares under this Schedule.

SCHEDULE 6

(Sections 3(h) and 143)

AMALGAMATIONS

CONTENTS

1. Approval of amalgamation

proposal

2. Contents of amalgamation

proposal

3. Process for approving

amalgamation proposal

4. Short form of amalgamation

__________

1. Approval of amalgamation proposal – (1) Subject to

sub-clause (2), an amalgamation proposal must be approved in

accordance with clause 3 and the rules of each amalgamating

company.

(2) An amalgamation proposal that relates to the

amalgamation:

(a) of a company with 1 or more other companies that

is or that are directly or indirectly wholly owned

by it; or

(b) of 2 or more companies each of which is directly or

indirectly wholly owned by the same person,

may be approved in accordance with clause 4.

2. Contents of amalgamation proposal – (1) An

amalgamation proposal must set out the terms of the

amalgamation, and, in particular:

(a) the name of the amalgamated company, which may

be the name of 1 of the amalgamating

companies, or a new name that complies with

section 10; and

(b) whether the amalgamated company is a private

company or a public company; and

(c) the full name and residential address and postal

address of any proposed director of the

amalgamated company; and


(d) the registered office of the amalgamated company;

and

(e) the postal address of the amalgamated company,

which may be either the postal address of the

registered office or any other postal address; and

(f) the manner in which the shares of each

amalgamating company are to be converted into

shares of the amalgamated company; and

(g) if shares of an amalgamating company are not to be

converted into shares of the amalgamated

company, the consideration that the holders of

those shares are to receive instead of shares of

the amalgamated company; and

(h) any payment to be made to a shareholder or director

of an amalgamating company, other than a

payment of the kind described in paragraph (g);

and

(i) details of any arrangement necessary to complete

the amalgamation and to provide for the

subsequent management and operation of the

amalgamated company.

(2) The amalgamation proposal must:

(a) specify whether the rules of the amalgamated

company will be the model rules in Schedule 2,

3, or 4; or

(b) include a copy of the rules of the amalgamated

company, if they differ from the model rules.

(3) An amalgamation proposal may specify the date on

which the amalgamation is intended to become effective.

(4) If shares of 1 of the amalgamating companies are held

by or on behalf of another of the amalgamating companies, the

amalgamation proposal:

(a) must provide for the cancellation of those shares

without payment or the provision of other

consideration when the amalgamation becomes

effective; and

(b) must not provide for the conversion of those shares

into shares of the amalgamated company.

3. Process for approving amalgamation proposal – (1)

The directors of each amalgamating company must send to each


shareholder of the company, not less than 20 working days

before the amalgamation is proposed to take effect:

(a) a copy of the amalgamation proposal; and

(b) a statement setting out the rights of shareholders

under section 147; and

(c) a statement of any material interests of the directors

in the proposal, whether in that capacity or

otherwise; and

(d) such further information and explanation as may be

necessary to enable a reasonable shareholder to

understand the nature and implications for the

company and its shareholders of the proposed

amalgamation.

(2) The amalgamation proposal must be approved:

(a) by the shareholders of each amalgamating company

by special resolution, as if the proposal were a

proposal to alter the rules of the company; and

(b) if a provision in the amalgamation proposal would,

if contained in an amendment to an

amalgamating company’s rules or otherwise

proposed in relation to that company, require the

approval of an interest group, by—

(i) a special resolution of each interest

group; or

(ii) all shareholders under section 51 of

the Act.

4. Short form amalgamation – (1) An amalgamation

proposal in relation to a company (parent company) and 1 or

more other companies that is or that are directly or indirectly

wholly owned by it may be approved by a resolution of the

directors of each amalgamating company, if the amalgamation

proposal provides that:

(a) the shares of each amalgamating company, other

than the parent company, will be cancelled

without payment or other consideration; and

(b) the rules of the amalgamated company will be the

same as the rules of the parent company.

(2) An amalgamation proposal in relation to 2 or more

companies, each of which is directly or indirectly wholly owned

by the same person, may be approved by a resolution of the


directors of each amalgamating company, if the amalgamation

proposal provides that:

(a) the shares of all but 1 of the amalgamating

companies will be cancelled without payment or

other consideration; and

(b) the rules of the amalgamated company will be the

same as the rules of the amalgamating company

whose shares are not cancelled.

SCHEDULE 7 (repealed by the personal property securities act 2013, no 5)

SCHEDULE 8

(Sections 3(i) and 156)

POWERS, FUNCTIONS, AND LIABILITIES OF

ADMINISTRATORS

CONTENTS

PART 1

PRELIMINARY

PROVISIONS

1. Administrator is company’s

agent

2. Administrator has qualified

privilege

3. Administrator may seek

directions

4. Exercise of powers, etc, by 2

or more administrators

5. Exercise of powers, etc, by 2

or more administrators under

compromise

PART 2

POWERS AND FUNCTIONS

OF ADMINISTRATORS

6. General powers of

administrators

7. Limitations on

administrator’s powers

8. Dealing with property

subject to floating charge

that has become fixed charge

9. When administrator may

dispose of encumbered

property

PART 3

LIABILITY OF

ADMINISTRATORS


LIABILITY

10. Administrator not liable in

damages for refusing consent

11. Liability of administrator for

company’s debts


debts incurred by

administrator

Division 2 – LIABILITY FOR

RENT, ETC


13. Application of clauses 14 to

17


rent

15. Notice stating company does

not propose to exercise rights

over property

16. Effect of notice

17. When notice ceases to have

effect

Division 3 – INDEMNITY

18. Administrator is entitled to

indemnity

19. Administrator’s indemnity

has priority over unsecured

debts, etc

20. Exception for debts secured

by floating charge

21. Extent of administrator’s

indemnity when floating

charge has priority

__________

PART 1

PRELIMINARY PROVISIONS

1. Administrator is company’s agent – When exercising

a power, or performing a function, as administrator of a

company, the administrator is taken to be acting as the

company's agent.

2. Administrator has qualified privilege – A person who

is, or has been, the administrator of a company has qualified

privilege in respect of a statement that he or she has made,

whether orally or in writing, in the course of exercising his or

her powers, or performing his or her functions, as administrator

of the company.

3. Administrator may seek directions – (1) The

administrator of a company, or any person who chairs a meeting

of creditors held under Division 1 of Part 9 of the Act, may

apply to the Court for directions about a matter arising in

connection with the exercise of his or her powers or the

performance of his or her functions.

(2) The administrator under a compromise approved under

Division 1 of Part 9 of the Act may apply to the Court for

directions about a matter arising in connection with the

operation of, or giving effect to, the compromise.

4. Exercise of powers, etc., by 2 or more administrators

– (1) If Division 1 of Part 9 of the Act provides for an


administrator of a company to be appointed, 2 or more persons

may be appointed as administrators of the company.

(2) If there are 2 or more administrators of a company:

(a) a function or power of an administrator of the

company may be performed or exercised by any

1 of them, or by any 2 or more of them together,

except so far as the document or resolution

appointing them otherwise provides; and

(b) a reference in the Act to an administrator, or to the

administrator, of a company is a reference to

whichever 1 or more of those administrators the

case requires.

5. Exercise of powers, etc., by 2 or more administrators

under compromise – If there are 2 or more administrators of a

compromise approved under Division 1 of Part 9 of the Act:

(a) a function or power of an administrator under the

compromise may be performed or exercised by

any 1 of them, or by any 2 or more of them

together, except so far as the document or

resolution appointing them otherwise provides;

and

(b) a reference in the Act to an administrator under a

compromise is a reference to whichever 1 or

more of those administrators the case requires.

PART 2

POWERS AND FUNCTIONS OF ADMINISTRATORS

6. General powers of administrator – While a company

is under administration, the administrator has control of the

company’s business, property, and affairs and may:

(a) carry on the company’s business;

(b) manage the company’s property and affairs;

(c) terminate or dispose of all or any part of the

company’s business;

(d) dispose of all or any part of the company’s

property;

(e) exercise any power, and perform any function, that

the company or any of its officers could perform


or exercise if the company were not under

administration;

(f) with leave of the Court, remove from office a

director of the company;

(g) with leave of the Court, appoint a person as a

director of the company, whether to fill a

vacancy or not;

(h) execute a document, bring or defend proceedings,

or do anything else, in the company’s name and

on its behalf;

(i) do whatever else is necessary for the purposes of

Division 1 of Part 9 of the Act.

7. Limitations on administrators power’s – (1) If clause

23 of Schedule 10 applies, the administrator’s powers and

functions are subject to the powers and functions of:

(a) the secured creditor; or

(b) a receiver or person of a kind referred to in clause

23 of Schedule 10 (even if appointed after the

decision period).

(2) If clause 19 of Schedule 10 applies, then, so far as

concerns perishable property of the company, the

administrator’s powers and functions are subject to the powers

and functions of:

(a) the secured creditor; or

(b) a receiver or person appointed (at any time) as

mentioned in paragraph (a), (b), or (d) of the

definition of “enforce” in clause 1 of Schedule 1.

(3) If clause 14, 15, or 20 of Schedule 10 applies, then, so

far as concerns the property referred to in those clauses, the

administrator’s powers and functions are subject to the powers

and functions of the secured creditor, receiver, or other person.

8. Dealing with property subject to floating charge that

has become fixed charge – If a floating charge over property of

a company has become a fixed charge, then, subject to this

Schedule, the administrator may deal with any of that property

as if the charge were still a floating charge.


9. When administrator may dispose of encumbered

property – (1) The administrator of a company must not

dispose of:

(a) property of the company that is subject to a charge;

or

(b) property that is used or occupied by, or is in the

possession of, the company but of which

someone else is the owner or lessor.

(2) Sub-clause (1) does not prevent a disposal:

(a) in the ordinary course of the company's business if

it is authorised by the terms of the relevant

charge,

agreement authorising use or possession, lease or

without agreement of the secured creditor,

owner, or lessor; or

(b) with the written consent of the secured creditor,

owner, or lessor, as the case may be; or

(c) with the leave of the Court.

(3) The Court may give leave under subclause (2)(c) only if

it is satisfied that arrangements have been made to protect

adequately the interests of the secured creditor, owner, or lessor,

as the case may be.

PART 3

LIABILITY OF ADMINISTRATORS

Division 1 – GENERAL LIABILITY

10. Administrator not liable in damages for refusing

consent – A company’s administrator is not liable to an action

or other proceeding for damages for refusing to give an

approval or consent under Division 1 of Part 9 of the Act.

11. Liability of administrator for company’s debts -

Except as expressly provided in Division 1 of Part 9 of the Act

or this Schedule, the administrator of a company is not liable for

the company’s debts.

12. Liability of administrator for debts incurred by

administrator – (1) The administrator of a company is liable

for the debts that the administrator incurs in the exercise of his


or her powers, or performance of his or her functions, as

administrator for:

(a) services rendered:

(b) goods bought:

(c) property hired, leased, used, or occupied.

(2) Sub-clause (1) has effect despite any agreement to the

contrary, but without prejudice to the administrator’s rights

against the company or anyone else.

Division 2 – LIABILITY FOR RENT, ETC

13. Application of clauses 14 to 17 – Clauses 14 to 17

apply if, under an agreement made before the administration of

a company began, the company continues to use or occupy, or

to be in possession of, property of which someone else is the

owner or lessor.

14. Liability of administrator for rent – (1) Subject to this

clause, the administrator is liable for that part of the rent or

other amounts payable by the company under the agreement

referred to in clause 13 for any period:

(a) that begins more than 10 working days after the

administration began; and

(b) throughout which:

(i) the company continues to use or occupy, or

to be in possession of, the property; and

(ii) the administration continues.

(2) Sub-clause (1) does not apply to so much of a period that

elapses after:

(a) a receiver of the property is appointed; or

(b) a secured creditor appoints an agent, under the

provisions of a charge on the property, to enter

into possession, or to assume control, of the

property; or

(c) a secured creditor takes possession, or assumes

control, of the property under the provisions of a

charge on the property.

(3) Sub-clause (1) does not apply in so far as a Court, by

order, excuses the administrator from liability.

(4) Sub-clauses (2) and (3) do not affect the liability of the

company.


(5) The administrator is not taken because of sub-clause (1):

(a) to have adopted the agreement; or

(b) to be liable under the agreement otherwise than as

mentioned in sub-clause (1).

15. Notice stating company does not propose to exercise

rights over property – Within 10 working days after the

beginning of the administration, the administrator may give to

the owner or lessor a notice that:

(a) specifies the property; and

(b) states that the company does not propose to

exercise rights in relation to the property.

16. Effect of notice – Despite clause 14, the administrator is

not liable for so much of the rent or other amounts payable by

the company under the agreement that is attributable to a period

during which a notice under clause 15 is in force, but such a

notice does not affect a liability of the company.

17. When notice ceases to have effect – (1) A notice under

clause 14 ceases to have effect if:

(a) the administrator revokes it in writing given to the

owner or lessor; or

(b) the company exercises, or appears to exercise, a

right in relation to the property.

(2) For the purposes of sub-clause (1), the company does not

exercise, or appear to exercise, a right in relation to the property

merely because the company continues to occupy, or to be in

possession of, the property, unless the company:

(a) also uses the property; or

(b) asserts a right, as against the owner or lessor, so to

continue.

Division 3 – INDEMNITY

18. Administrator is entitled to indemnity – (1) The

administrator of a company is entitled to be indemnified out of

the company’s property for:

(a) the debts for which the administrator is liable under

the Act; and

(b) the costs incurred in relation to holding a meeting

of creditors under Division 1 of Part 9; and


(c) his or her remuneration.

(2) To secure the administrator’s indemnity, the

administrator has a lien on the company’s property.

(3) An administrator’s lien has priority over a charge to the

extent that the indemnity has priority over debts secured by the

charge.

19. Administrator’s indemnity has priority over

unsecured debts, etc., – Subject to claims having preference

under Part 3 of Schedule 18, an administrator’s indemnity has

priority over:

(a) all the company’s unsecured debts; and

(b) subject to clauses 20 and 21, debts of the company

secured by a floating charge on property of the

company.

20. Exception for debts secured by floating charge – An

administrator’s indemnity does not have priority over debts

secured by a floating charge if:

(a) before the beginning of the administration, the

secured party—

(i) appointed a receiver of property of the

company under a power contained in the

floating charge document concerned; or

(ii) obtained an order for the appointment of a

receiver of property of the company for

the purpose of enforcing the charge; or

(iii) entered into possession, or assumed control,

of property of the company for the

purpose of enforcing the charge; or

(iv) appointed a person so to enter into

possession or assume control (whether as

agent for the secured creditor or for the

company); and

(b) the receiver or person is still in office, or the

secured party is still in possession or control of

the property.

21. Extent of administrator’s indemnity when floating

charge has priority – The extent to which a floating charge has

priority over an administrator’s indemnity is limited to debts


incurred, or remuneration accruing, after the secured party gave

written notice to the administrator of the matter specified in

clause 20(a) that gave the secured party priority over the

indemnity.

SCHEDULE 9

(Sections3(i), 156 and 158(2)(a))

OFFICE OF ADMINISTRATOR

CONTENTS

PART 1

RESTRICTIONS ON

APPOINTMENT OF

ADMINISTRATOR

1. Who may not be appointed

or act as administrator

2. Validity of acts of

administrators

3. Person must consent to being

appointed administrator

4. Court may declare whether

administrator validly

appointed

PART 2

VACANCY IN OFFICE OF

ADMINISTRATOR

5. Vacancy in office of

administrator

6. Replacement administrator to

hold creditors’ meeting

7. Court order if vacancy in

office of administrator

8. Vacancy in office of

administrator under

compromise

PART 3

ADMINISTRATOR’S

REMUNERATION

9. Remuneration of

administrator

__________

PART 1

RESTRICTIONS ON APPOINTMENT OF

ADMINISTRATORS

1. Who may not be appointed or act as administrator –

None of the following may be appointed or act as an

administrator of a company or under a compromise:

(a) a corporation;

(b) a person who is under 21 years of age;

(c) a creditor of the company under administration;

(d) a person who has, within the 2 years immediately

before the commencement of the administration,

been a shareholder, director, auditor, or receiver

of the company or of a related company;

(e) an un-discharged bankrupt;



(g) a person who would, but for the repeal of the

Companies Act 1955, be prohibited from being a

director or promoter, or being concerned or

taking part in the management, of a company

within the meaning of that Act;

(h) a person who is prohibited from being a director or

promoter of or being concerned or taking part in

the management of, a company under the Act;

(i) a person who is prohibited from acting as a

liquidator under the Act;

(j) a person who is prohibited from acting as a receiver

under the Receiverships Act 2005.

2. Validity of acts of administrators – The acts of a

person as an administrator are valid even though that person

may not be qualified to act as an administrator.

3. Person must consent to being appointed

administrator – (1) A person must not be appointed as

administrator of a company or under a compromise unless the

person has consented in writing to the appointment.


(2) The administrator must lodge his or her consent, with

the registration, together with notice of his or her appointment.

4. Court may declare whether administrator validly

appointed – (1) If there is doubt on a specific ground about

whether the appointment of a person as administrator of a

company is valid, the person, the company, or any of the

company’s creditors may apply to the Court for an order under

sub-clause (2).

(2) The Court may, on application, make an order declaring

whether or not the appointment was valid on the ground

specified in the application or on some other ground.

PART 2

VACANCY IN OFFICE OF ADMINISTRATOR

5. Vacancy in office of administrator – (1) The person

who appointed an administrator of a company may appoint

someone else as administrator of the company if the

administrator:

(a) dies; or

(b) becomes prohibited from acting as administrator of

the company; or

(c) resigns by notice in writing given to his or her

appointer and to the company.

(2) Where the board of directors of a company appointed the

administrator of the company, an appointment under sub-clause

(1) may be made by the board despite clause 2 of Schedule 10.

(3) If a company is under administration, but for some

reason no administrator is acting, the Court may appoint a

person as administrator on the application of the Registrar or a

creditor or shareholder or, despite clause 2 of Schedule 10, of an

officer of the company.

6. Replacement administrator to hold creditors’

meeting – (1) Within 10 working days after being appointed as

administrator of a company under clause 5 otherwise than by

the Court, the administrator must hold a meeting of the

company’s creditors under Schedule 12 so that they may:

(a) determine whether to remove the person from

office; and


(b) if so, appoint someone else as administrator of the

company.

(2) At least 5 working days before a creditors’ meeting is held

under this clause, the administrator must give:

(a) written notice of the meeting to any secured party

who holds a registered charge over the property

of the company; and

(b) written notice of the meeting to as many of the

company’s other creditors as reasonably

practicable; and

(c) public notice of the meeting.

7. Court order if vacancy in office of administrator –

(1) The Court may make such order as it thinks just if the Court

is satisfied that:

(a) a company is under administration but—

(i) there is a vacancy in the office of

administrator of the company; or

(ii) no administrator of the company is acting;

or

(b) a compromise approved under Division 2 of Part 9

has not yet terminated but—

(i) there is a vacancy in the office of

administrator under the compromise; or

(ii) no administrator under the compromise is

acting.

(2) The Registrar, or a creditor or shareholder of the

company, are the only persons who may apply for an order

under sub-clause (1).

8. Vacancy in office of administrator under

compromise – (1) The Court may appoint another person as

administrator under a compromise if the administrator:

(a) dies; or

(b) becomes prohibited from acting as administrator

under the compromise; or

(c) resigns by notice in writing given to the company.

(2) If a compromise has not yet terminated, but for some

reason no administrator under the compromise is acting, the

Court may appoint a person as administrator under the

compromise.


(3) An appointment may be made on the application of the

Registrar or of an officer, shareholder or creditor of the

company.

PART 3

ADMINISTRATORS’ REMUNERATION

9. Remuneration of administrator – (1) The

administrator of a company under administration, or acting

under a compromise approved by creditors in accordance with

section 187(1)(a) of the Act, is entitled to:

(a) any remuneration that is—

(i) fixed by a resolution of the company’s

creditors passed at a meeting convened

under section 183 of the Act; or

(ii) specified by the document setting out the

terms of the compromise; or

(b) if no remuneration is fixed, any remuneration that

the Court fixes on the application of the

administrator.

(2) Despite clause 2 of Schedule 10, if remuneration is fixed

under sub-clause (1)(a) of this Schedule, the Court may review

the remuneration and confirm, increase, or reduce it on the

application of:

(a) the administrator of the company; or



(d) a creditor of the company.

SCHEDULE 10

(Sections3(i) and 156, Clause7 of Schedule 8,and

Clauses5(4) and 9(2) of Schedule 9)

EFFECT OF ADMINISTRATION

CONTENTS

PART 1

PRELIMINARY

PROVISIONS

1. Time for doing act does not

run while act prevented by

administration

PART 2

EFFECT ON COMPANY’S

OFFICERS AND

SHAREHOLDERS, ETC

2. Functions and powers of

company officers suspended

used by company

3. Effect on company’s

shareholders

4. Restrictions on putting

company into liquidation

PART 3

EFFECT ON PROCEEDINGS

5. Stay of civil proceedings

6. Suspension of enforcement

process

7. Duties of Court officer in

relation to property of

company

8. Court officer must deliver

company property, etc, to

administrator

9. Good faith buyer under

execution process gets good

title

PART 4

RESTRICTIONS ON

DEALING WITH

COMPANY’S PROPERTY

10. Only administrator can deal

with company’s property

11. Offence for company officer

to enter into void transaction

or dealing

12. Order for compensation

13. Owner or lessor not to

recover property

14. Exception: perishable

property

15. Exception: recovery of

property before

administration

16. Court may limit powers of

receiver, etc, in relation to

property used by company

17. Giving notice relating to

property used by company

18. Charge unenforceable

19. Exception: charge on

perishable property

20. Exception: enforcement of

charge before administration

21. Court may limit powers of

secured creditor, etc, in

relation to charged property

22. Giving notice under charge

23. When secured creditor acts

before or during decision

period

PART 5

EFFECT ON GUARANTEES

24. Administration not to trigger

liability under guarantee

25. Court orders

26. Grounds for making order

under clause 25

27. Interim order

28. No undertaking as to

damages

29. Variation or discharge of

order

30. Operation of orders

31. Application of Bankruptcy

Act 1908

________

PART 1


1. Time for doing act does not run while act prevented

by administration – If, for any purpose, an act must or may be

done within a particular period or before a particular time, and

the Act prevents the act from being done within that period or

before that time, the period is extended, or the time is deferred,

according to how long this Act prevented the act from being

done.

PART 2

EFFECT ON COMPANY’S OFFICERS AND

SHAREHOLDERS, ETC

2. Functions and powers of company officers suspended

– (1) Subject to clauses 19(2), 20(2), 22, and 23(3), while a

company is under administration, no person (other than the

administrator) may, without the administrator’s written

approval, perform a function, or exercise a power, as an officer

of the company.

(2) Sub-clause (1) does not have the effect of removing an

officer of a company from his or her office.

3. Effect of administration on company’s shareholders

– A transfer of shares in a company, or an alteration in the

status of shareholders of a company, that is made during the

administration of the company is void except:

(a) with the consent of the administrator; or

(b) so far as the Court otherwise orders.

4. Restrictions on putting company into liquidation – If

a company is under administration:

(a) the shareholders and the directors of the company

must not appoint a liquidator;

(b) if the Court is satisfied that it is in the interests of

the company’s creditors for the company to

continue under administration, rather than for a


liquidator or an interim liquidator to be

appointed, as the case may be—

(i) the Court must adjourn the hearing of an

application for an order to appoint a

liquidator; and

(ii) the Court must not appoint an interim

liquidator.

PART 3

EFFECT ON PROCEEDINGS, ETC

5. Stay of civil proceedings – During the administration

of a company, a civil proceeding in a Court against the

company or in relation to any of its property must not be started

or proceeded with, except with:

(a) the administrator’s written consent; or

(b) the leave of the Court and in accordance with any

conditions that the Court imposes.

6. Suspension of enforcement process – During the

administration of a company, any enforcement process in

relation to property of the company must not be started or

proceeded with, except:

(a) with the leave of the Court; and

(b) in accordance with any conditions that the Court

imposes.

7. Duties of Court officer in relation to property of

company – A court officer who receives written notice of the

fact that a company is under administration must not:

(a) take action to sell property of the company under a

process of execution; or

(b) pay to a person who is not the administrator—

(i) proceeds of selling property of the company

(at any time) under a process of

execution; or

(ii) money of the company seized (at any time)

under a process of execution; or

(iii) money paid (at any time) to avoid seizure or

sale of property of the company under a

process of execution; or


(c) take action in relation to the attachment of a debt

due to the company; or

(d) pay to a person (other than the administrator)

money received because of the attachment of

such a debt.

8. Court officer must deliver company property, etc, to

administrator – (1) The Court officer must:

(a) deliver to the administrator any property of the

company that is ever in the Court officer’s

possession under a process of execution; and

(b) pay to the administrator all proceeds or money of a

kind referred to in clause 7(b) or (d) that -

(i) are in the Court officer’s possession; or

(ii) have been paid into the Court and have not

since been paid out.

(2) The costs of the execution or attachment are a first

charge on property delivered, or proceeds or money paid, to the

administrator.

(3) In order to give effect to a charge on proceeds or money,

the Court officer may retain, on behalf of the person entitled to

the charge, so much of the proceeds or money as the Court

officer thinks necessary.

(4) The Court may, if it is satisfied that it is appropriate to

do so, permit the Court officer to take action, or to make a

payment, that would otherwise be prevented.

9. Good faith buyer under execution process gets good

title – Despite anything in clauses 7 and 8, a person who buys

property in good faith under a sale under a process of execution

gets a good title to the property as against the company and the

administrator.

PART 4

RESTRICTIONS ON DEALING WITH COMPANY’S

PROPERTY

10. Only administrator can deal with company’s

property – (1) A transaction or dealing that affects property of

a company under administration is void unless:


(a) the administrator entered into it on the company’s

behalf; or

(b) the administrator consented to it in writing before it

was entered into; or

(c) it was entered into under an order of the Court.

(2) Sub-clause (1) has effect subject to any order that the

Court makes after the transaction or dealing.

11. Offence for company officer to enter into void

transaction or dealing – (1) The officer of a company that is

under administration commits an offence if the officer of the

company:

(a) purported to enter into a void transaction or dealing

on the company’s behalf; or

(b) was in any other way, by act or omission, directly

or indirectly, knowingly concerned in, or party

to, the void transaction or dealing.

(2) The officer of a company who is convicted under sub-

clause (1) is liable to a fine not exceeding 50 penalty units.

12. Order for compensation – (1) The Court may order a

person who has been convicted of an offence against clause

11(1) to pay compensation of a specified amount to the

company or other person who has suffered loss or damage as a

result of the offence.

(2) An order under sub-clause (1) may be enforced as if it

were a judgment of the Court.

(3) The defences available under section 76 to relieve a

person from liability for an offence referred to in that section

extend to relieving a person from liability to be ordered under

this clause to pay compensation.

13. Owner or lessor not to recover property used by

company – During the administration of a company, the owner

or lessor of property that is used or occupied by, or is in the

possession of, the company must not take possession of the

property or otherwise recover it, except:

(a) with the administrator’s written consent; or

(b) with the leave of the Court.


14. Exception: perishable property – (1) Nothing in

clause 2 or 13 prevents a person from taking possession of, or

otherwise recovering, perishable property.

(2) Clause 10 does not apply in relation to a transaction or

dealing that:

(a) affects perishable property; and

(b) is entered into for the purpose of enforcing a right

of the owner or lessor of the property to take

possession of the property or otherwise recover

it.

15. Exception: recovery of property before

administration – If, before the beginning of the administration

of a company, a receiver or other person, for the purpose of

enforcing a right of the owner or lessor of property that is used

or occupied by, or in possession of, the company, enters into

possession or assumes control of, or exercises any other power

in relation to, the property:

(a) nothing in clause 2 or 13 prevents the receiver or

other person from performing a function, or

exercising a power, in relation to the property;

and

(b) clause 10 does not apply in relation to a transaction

or dealing that affects the property and is entered

into in the performance of a function, or exercise

of a power, of the receiver or other person.

16. Court may limit powers of receiver, etc, in relation to

property used by company – (1) Despite clauses 14 and 15,

the Court may, on application by the administrator of a

company, order a person not to perform specified functions, or

exercise specified powers, in relation to property:

(a) that is used or occupied by, or in the possession of,

the company; and

(b) in respect of which the person, for the purpose of

enforcing a right as owner or lessor of the

property, has entered into possession, assumed

control, or exercised any other power.

(2) The Court may make an order only if it is satisfied that

what the administrator proposes to do during the administration

will adequately protect the interests of the owner or lessor.


(3) An order may be made under this clause, and has effect,

only during the administration of the company.

17. Giving notice relating to property used by company -

Nothing in clause 2 or 13 prevents a person from giving a notice

to a company under an agreement relating to property that is

used or occupied by, or is in the possession of, the company.

18. Charge unenforceable – Subject to clauses 20, 22, and

23, during the administration of a company, a person must not

enforce a charge on property of the company, except:

(a) with the administrator’s written consent; or

(b) with the leave of the Court.

19. Exception: charge on perishable property – Despite

anything in this Schedule, a secured creditor who has a charge

over perishable property of a company under administration, or

a receiver or other appointed person who is entitled to enforce

the charge, may:

(a) enforce the charge on the perishable property:

(b) enter into a transaction or dealing that affects the

perishable property.

20. Exception: enforcement of charge before

administration – (1) If, before the beginning of the

administration of a company, a secured creditor, receiver, or

other person, has, for the purpose of enforcing a charge on

property of the company, done any of the things specified in

sub-clause (2):

(a) nothing in clause 2 or 18 prevents the secured

creditor, receiver, or other person from enforcing

the charge in relation to the property; and

(b) clause 10 does not apply in relation to a transaction

or dealing that affects the property and is entered

into—

(i) in the exercise of a power of the secured

creditor as secured creditor; or

(ii) in the performance of a function, or exercise

of a power, of the receiver or other

person.


(2) The things referred to in sub-clause (1) are the secured

creditor as secured creditor or the receiver or other person has:

(a) entered into possession, or assumed control, of

property of the company; or

(b) entered into an agreement to sell the property; or

(c) made arrangements for the property to be offered

for sale by public auction; or

(d) publicly invited tenders for the purchase of the

property; or

(e) exercised any other power in relation to the

property.

21. Court may limit powers of secured creditor, etc. in

relation to charged property – (1) Despite clauses 19 and 20,

the Court may, on application by the administrator of a

company, order a secured creditor, receiver, or other person not

to perform specified functions or exercise specified powers if,

for the purpose of enforcing a charge on property of a company,

the secured creditor, receiver, or other person, does an act of a

kind referred to in clause 19(1).

(2) Sub-clause (1) does not apply in a case to which clause

23 applies.

(3) The Court may make an order only if it is satisfied that

what the administrator proposes to do during the administration

will adequately protect the secured creditor’s interests.

(4) An order may be made under this clause, and has effect,

only during the administration of the company.

22 Giving notice under charge – Nothing in clause 2 or 18

prevents a person from giving a notice under the charge.

23 When secured creditor acts before or during decision

period – (1) This clause applies if:

(a) all of the property of a company under

administration is subject to a charge; and

(b) before or during the decision period, the secured

creditor enforced the charge in relation to all

property of the company subject to the charge,

whether or not the charge was enforced in the

same way in relation to all that property.

(2) This clause also applies if:


(a) a company is under administration; and

(b) the same person is the secured creditor in relation to

each of 2 or more charges on property of the

company; and

(c) the property of the company subject to the

respective charges together constitutes all, or

almost all, of the company’s property; and

(d) before or during the decision period, the secured

creditor enforced the charges in relation to all the

charged property—

(i) whether or not the charges were enforced in

the same way in relation to all the

charged property; and

(ii) whether or not any of the charges were

enforced in the same way in relation to

all the property of the company subject to

that charge; and

(iii) in so far as the charges were enforced in

relation to property of the company in a

way referred to in paragraph (a), (b), or

(d) of the definition of “enforce” in

clause 1 of Schedule 1, whether or not

the same person was appointed in respect

of all of that property.

(3) Nothing in clause 2 or 18 prevents any of the following

from enforcing the charge, or any of the charges:

(a) the secured creditor entitled to the charge or

charges:

(b) a receiver or person referred to in paragraph (a), (b),

or (d) of the definition of “enforce”, or any of the

charges (even if appointed after the decision

period).

(4) Clause 10 does not apply in relation to a transaction or

dealing that affects property of the company and is entered into

by the secured creditor, a receiver, or person of a kind referred

to in sub-clause (3)(b), in the performance of a function, or

exercise of a power, as secured creditor, or as a receiver, or

person, as the case may be.

PART 5

EFFECT ON GUARANTEES


24. Administration not to trigger liability under

guarantee – Except with the leave of the Court and in

accordance with any conditions that the Court imposes, during

the administration of a company:

(a) a guarantee of a liability of the company must not

be enforced as against—

(i) a director or shareholder of the company who

is a natural person; or

(ii) a spouse or relative of the director or

shareholder; and

(b) without limiting paragraph (a), a proceeding, in

relation to a guarantee, must not be started

against a director, shareholder, spouse, or

relative.

25. Court orders – (1) Despite clause 24, the Court may, on

application by the creditor, make 1 or more of the following

orders:

(a) an order prohibiting a person who is indebted to the

guarantor or to an associate of the guarantor

from making a payment in total or partial

discharge of the debt to, or to another person at

the direction or request of, the person to whom

the debt is owed;

(b) an order prohibiting a person holding money,

securities, futures contracts or other property, on

behalf of the guarantor, or on behalf of an

associate of the guarantor, from paying all or any

of the money, or transferring, or otherwise

parting with possession of, the securities, futures

contracts or other property, to, or to another

person at the direction or request of, the person

on whose behalf the money, securities, futures

contracts or other property, is or are held;

(c) an order prohibiting the taking or sending out of the

jurisdiction of Samoa by a person, money of the

guarantor or of an associate of the guarantor;

(d) an order prohibiting the taking, sending or transfer

by a person of securities, futures contracts or


other property of the guarantor, or of an associate

of the guarantor –

(i) from a place under the jurisdiction of Samoa

to a place outside the jurisdiction

(including the transfer of securities from

a register in the jurisdiction of Samoa to a

register outside that jurisdiction); or

(ii) from a place in Samoa to a place outside

Samoa (including the transfer of

securities from a register in Samoa to a

register outside Samoa);

(e) an order appointing, a receiver or trustee, having

such powers as the Court orders, of the property

or of part of the property of a person who is an

individual;

(f) an order appointing a receiver, having such powers

as the Court orders, of all or any part of the

property of a guarantor who is a body corporate;

(g) an order prohibiting a guarantor who is an

individual from leaving Samoa without the

consent of the Court.

(2) A reference in sub-clause (1)(d), (e), or (f) to property of

a person includes reference to property that the person holds

otherwise than as sole beneficial owner, for example:

(a) as trustee for, as nominee for, or otherwise on

behalf of or on account of, another person; or

(b) in a fiduciary capacity.

(3) An order under sub-clause (1) prohibiting conduct may

prohibit the conduct either absolutely or subject to conditions.

26. Grounds for making order under clause 25 – The

Court may make an order under clause 25 if the Court considers

it necessary or desirable to do so for the purpose of protecting

the interests of the creditor to whom a guarantor is liable, or

may become liable, to pay money, whether in respect of a debt,

by way of damages or compensation or otherwise, or to account

for securities, futures contracts, or other property.

27. Interim order – If an application is made to the Court

for an order under clause 25, the Court may, if in the opinion of

the Court it is desirable to do so, before considering the


application, grant an interim order (being an order of the kind

applied for) that is expressed to have effect pending the

determination of the application.

28. No undertaking as to damages – On an application

under clause 25, the Court must not require the applicant or any

other person, as a condition of granting an interim order, to give

an undertaking as to damages.

29. Variation or discharge of order – If the Court has

made an order on a person’s application under clause 25, the

Court may, on application by that person or by any person

affected by the order, make a further order discharging or

varying the first order.

30. Operation of orders – An order made under clause 25

or 27 may be expressed to operate for a specified period or until

the order is discharged by a further order.

31. Application of Bankruptcy Act 1908 – Clauses 24 to

30 have effect subject to the Bankruptcy Act 1908 as modified

by the Samoa Bankruptcy Order 1922.

SCHEDULE 11

(Sections 3(i) and 156)

CREDITORS’ COMMITTEES

1. Functions of committees of creditors – (1) The

functions of a committee of creditors of a company under

administration are:

(a) to consult with the administrator about matters

relating to the administration; and

(b) to receive and consider reports by the administrator.

(2) A committee must not give directions to the

administrator, except as provided in sub-clause (3).

(3) As and when a committee reasonably requires, the

administrator must report to the committee about matters

relating to the administration.

(4) Schedule 12, with the necessary modifications, applies

to meetings of committees of creditors.


2. Membership of committee – A person may be a

member of a committee of creditors of a company under

administration if, and only if, he or she is:

(a) a creditor of the company; or

(b) the attorney of such a creditor because of a general

power of attorney; or

(c) authorised in writing by such a creditor to be such a

member.

SCHEDULE 12

(Sections 3, 156, 179(3), 183, 187(2), 205(2)

206(1), 211, 245(2)(c), and 246(3)(b),

Clause6 (1) Schedule 9 and Clause1(4) Schedule 11)

MEETINGS OF CREDITORS

CONTENTS

PART 1

GENERAL PROVISIONS

1. Procedure generally

2. Effect of irregularity or

defect

PART 2

METHODS OF HOLDING

MEETINGS



Division 2 – NOTICE OF

MEETING


5. Contents of notice

6. Effect of irregularity, etc, in

notice

Division 3 – MEETING

7. Adjournment of meeting

8. Chairperson

9. Quorum

10. Corporations may act by

representatives

11. Keeping of record of

attendance and minutes

Division 4 – PROXIES

12. Proxies

13. Administrator or liquidator

may act as proxy

14. Irregularity in notice of

proxy

15. Limits on holder of proxy

Division 5 – VOTING

16. Creditors entitled to vote in

liquidations

17. Entitlement to vote, etc.,

determined by chairperson

18. Voting by secured creditors

19. When resolution adopted

Division 6 –POSTAL VOTING


20. Who may cast postal vote

21. Postal vote cast in respect of

different resolution

22. Person authorised to receive

and count postal votes

23. How to cast postal vote

24. Duty of person authorised to

receive and count postal

votes

25. Duty of chairperson

PART 1

GENERAL PROVISIONS

1. Procedure generally – Except as provided in this

Schedule and in any regulations made under the Act, a meeting

of creditors may regulate its own procedure.

2. Effect of irregularity or defect – (1) An irregularity or

defect in the proceedings at a meeting of creditors does not

invalidate anything done by a meeting of creditors, unless the

Court orders otherwise.

(2) The Court may, on the application of the administrator

or liquidator, as the case may be, or a creditor of the company,

make an order under sub-clause (1) if it is satisfied that

substantial injustice would be caused if the order were not

made.

PART 2

METHODS OF HOLDING MEETINGS


3. Methods of holding meetings – A meeting of creditors

may be held:

(a) by assembling together those creditors entitled to

take part and who choose to attend at the place,

date, and time appointed for the meeting by the

person convening the meeting as being in his or

her opinion the most convenient place, date and

time for the majority of creditors; or


communication by which all creditors

participating can simultaneously hear each other

throughout the meeting; or


(c) by conducting a postal ballot in accordance with

clauses 19 to 24 of those creditors entitled to

take part.

Division 2 – NOTICE OF MEETING

4. Notice of meeting – At least 5 working days before a

creditors meeting, written notice must be sent to any creditor

entitled to attend the meeting of:

(a) the time and place of any meeting to be held under

clause 3(a); or

(b) the time and method of communication for any

meeting to be held under clause 3(b); or

(c) the time and address for the return of voting papers

for any meeting to be held under clause 3(a), (b),

or (c).

5. Contents of notice – The notice must:

(a) state the nature of the business to be transacted at

the meeting in sufficient detail to enable a

creditor to form a reasoned judgment in relation

to it; and

(b) set out the text of any resolution to be submitted to

the meeting; and

(c) include a voting paper in respect of each such

resolution and voting and mailing instructions;

and

(d) state that if a creditor votes by casting a postal vote

in respect of a resolution that is to be submitted

to the meeting and a different resolution is

submitted to the meeting–

(i) the creditors postal vote is invalid in respect

of that different resolution; but

(ii) the creditor may vote, in respect of that

different resolution, either by being

present in person or by proxy.

6. Effect of irregularity, etc., in notice – An irregularity

in or a failure to receive a notice of meeting of creditors does

not invalidate anything done by a meeting of creditors if:

(a) the irregularity or failure is not material; or


(b) all the creditors entitled to attend and vote at the

meeting attend the meeting without protest as to

the irregularity or failure; or

(c) all such creditors agree to waive the irregularity or

failure.

Division 3 – MEETING

7. Adjournment of meeting – (1) If the meeting of

creditors agree, the chairperson may adjourn the meeting from

place to place.

(2) An adjourned meeting must be held in the same place

unless another place is specified in the resolution for the

adjournment.

(3) If a meeting of creditors under clause 3(a) or (b) is

adjourned for less than 30 days, it is not necessary to give notice

of the time and place of the adjourned meeting other than by

announcement at the meeting that is adjourned.

8. Chairperson – (1) If an administrator or liquidator, as

the case may be, has been appointed and is present, or if the

administrator or liquidator has appointed a nominee and the

nominee is present, he or she must act as chairperson of a

meeting held in accordance with clause 3(a) or (b).

(2) At any meeting of creditors, if the administrator or

liquidator or any nominee of the administrator or liquidator, as

is applicable, is not present, or if there is no administrator or

liquidator holding office for the time being, the creditors

participating must choose 1 of their number to act as


(3) The person convening a meeting under clause 3(c) must

do anything necessary that would otherwise be done by the

person chairing a meeting.

9. Quorum – (1) A quorum for a meeting of creditors is

present if:

(a) three creditors who are entitled to vote or their

proxies are present or have cast postal votes; or

(b) if the number of creditors entitled to vote does not

exceed 3, the creditors who are entitled to vote or


their proxies are present or have cast postal

votes.



same day in the following week at the same time and place, or

to such other date, time, and place as the chairperson may

appoint, and if, at the adjourned meeting, a quorum is not

present within 30 minutes after the time appointed for the

meeting, the creditors present or their proxies are a quorum.

10. Corporations may act by representatives – A body

corporate that is a creditor may appoint a representative to

attend a meeting of creditors on its behalf.

11. Keeping of record of attendance and minutes – (1)

The chairperson of a meeting of creditors, or in the case of a

meeting held under clause 3(c), the person convening the

meeting must:

(a) ensure that an accurate record is kept of all creditors

present or represented at the meeting,

including—

(i) the name of each creditor present or

represented; and

(ii) whether the creditor has made a claim, and

the amount of the claim; and

(iii) whether the creditor has filed a proxy or is

present in person; and

(iv) the total number of creditors present or

represented; and

(b) ensure that minutes are kept of all proceedings.

(2) Records of attendance or minutes that have been signed

correct by the chairperson or the person convening the meeting

are prima facie evidence of the details recorded and proceedings

of the meeting.

Division 4 – PROXIES

12. Proxies – (1) A creditor may exercise the right to vote

either by being present in person or by proxy.

(2) A proxy for a creditor is entitled to attend and be heard

at a meeting of creditors as if the proxy were the creditor.



by the creditor and the notice must state whether the

appointment is for a particular meeting or a specified term not

exceeding 12 months.


copy of the notice of appointment is delivered to the

administrator or liquidator, as the case may be, or, if no

administrator or liquidator is acting in respect of a company in

administration or liquidation, to the person by whom the notice

convening the meeting was given, not less than 2 working days

before the start of the meeting.

13. Administrator or liquidator may act as proxy – (1) A

creditor may appoint any person, including the administrator or

liquidator or, if there is no administrator or liquidator, the

chairperson of a meeting, to act as his or her proxy.

(2) Subject to a direction of a meeting of creditors, an

administrator or liquidator must not solicit for proxies.

(3) Without limiting the orders that a Court may make, if an

administrator or liquidator, as the case may be, has not

complied with sub-clause (2), the Court may:

(a) order that the administrator or liquidator is not

entitled to his or her remuneration;

(b) make an order removing the administrator or

liquidator from office;

(c) make an order declaring any transaction entered

into by the administrator or liquidator to be void

or overturning any vote, and granting such

consequential relief as the Court thinks fit.

14. Irregularity in notice of proxy – If an irregularity that

is not material is contained in the notice of proxy, the

administrator or liquidator or chairperson of a meeting, as the

case may be, may accept the proxy as being valid for voting

purposes, if he or she is satisfied that the proxy holder

represents the creditor.

15. Limits on holder of proxy – (1) Subject to sub-clause

(2), no person acting under a proxy may vote in favour of or

against any resolution that would place that person, either

directly or indirectly, in a position to receive any benefit out of


the assets of the company otherwise than as a creditor rateably

with the other creditors of the company.

(2) A person who holds a proxy to vote for the appointment

of an administrator or liquidator, as the case may be, may use

the proxy to vote in favour of the appointment of himself or

herself as administrator or liquidator if it is not inconsistent with

the terms of the proxy to do so.

(3) If an administrator or liquidator, as the case may be, who

holds a proxy cannot attend a meeting of creditors called under

this Act, he or she may, in writing, nominate his or her partner

(if the administrator or liquidator or the administrator or

liquidator is a member of a partnership) or some person in his or

her employment, to use the proxy on his or her behalf and in

such manner as he or she may direct.

(4) Nothing in sub-clause (3) authorises the person

nominated to vote in a manner that would be in contravention of

sub-clauses (1) and (2) if the administrator or liquidator had

acted under the proxy personally.

Division 5 – VOTING

16. Creditors entitled to vote in liquidations – (1) In the

case of a company that is in liquidation, a person is not entitled

to vote as a creditor unless, by the time the vote is taken, the

creditor has made a claim and either:

(a) the liquidator has admitted the claim wholly or in

part either for payment or for voting purposes; or

(b) the chairperson of the meeting of creditors allows

the person to vote in accordance with clause 17.

(2) A creditor may not vote in respect of any claim that is of

an uncertain amount unless the value of the claim has been

estimated by the liquidator or determined by the Court in

accordance with clause 4 of Schedule 18.

17. Entitlement to vote, etc., determined by chairperson

– (1) For the purpose of determining whether a person is

allowed to vote at a meeting and the value of the person’s claim

for voting purposes, the chairperson has the power to determine

for the purpose of the meeting:

(a) that the person is a creditor of the company; and

(b) the value of a creditor’s claim against the company.


(2) If the chairperson is uncertain as to whether a person is a

creditor of the company or as to the value of the person’s claim

against the company, the chairperson must allow the person to

vote subject to the vote being subsequently declared invalid in

whole or in part by the chairperson.

(3) A creditor who is not entitled to vote, may, with the

leave of the administrator or liquidator, attend and speak at a

meeting of creditors.

(4) A creditor chairing the meeting does not have a casting

vote.

18. Voting by secured creditors – (1) In the case of a

meeting of creditors held under Division 1 of Part 9:

(a) a secured creditor is entitled to vote at the meeting:

(b) a secured creditor who votes at the meeting is not

taken to have surrendered his or her charge over

any property of the company.

(2) In the case of a meeting of creditors held under Division

3 of Part 9:

(a) a secured creditor is entitled to vote—

(i) for the whole debt if he or she surrenders the

charge to the liquidator for the general

benefit of creditors; or

(ii) in respect of the balance of the debt if he or

she values the charge and claims as an

unsecured creditor for the balance due; or

(iii) in respect of the balance of the debt if he or

she realises property subject to a charge

and claims as an unsecured creditor for

any balance due after deducting the net

amount realised:

(b) subject to this Act, if a secured creditor votes in

respect of the creditor’s whole debt, the creditor

is taken to have surrendered his or her charge:

(c) a creditor who is not entitled to vote may with the

leave of the liquidator attend and speak at the

meeting.

19. When resolution adopted – At any meeting of creditors

or a class of creditors, a resolution is adopted if a majority in

number and value of the creditors or the class of creditors


voting in person or by proxy or by postal vote, vote in favour of

the resolution.

Division 6 – POSTAL VOTING

20. Who may cast postal vote – A creditor entitled to vote

at a meeting of creditors held in accordance with clause 3(a),

(b), or (c) may exercise the right to vote by casting a postal vote

in relation to a matter to be decided at that meeting.

21. Postal vote cast in respect of different resolution – If

a creditor votes by casting a postal vote in respect of a

resolution that is to be submitted to the meeting and a different

resolution is submitted to the meeting:

(a) the creditor’s postal vote is invalid in respect of that

different resolution; but

(b) the creditor may vote, in respect of that different

resolution, either by being present in person or

by proxy.

22. Person authorised to receive and count postal votes –

(1) The notice of meeting must state the name of the person

authorised to receive and count postal votes in relation to that

meeting.

(2) If no person has been authorised to receive and count

postal votes in relation to a meeting, or if no person is named as

being so authorised in the notice of the meeting, the

administrator or liquidator, is taken to be so authorised.

23. How to cast postal vote – A creditor may cast a postal

vote on all or any of the matters to be voted on at the meeting

by sending a marked voting paper to a person authorised to

receive and count postal votes in relation to that meeting, so as

to reach that person not less than 2 working days before the start

of the meeting or, if the meeting is held under clause 3(c), not

later than the date named for the return of the voting paper.

24. Duty of person authorised to receive and count postal

votes – (1) It is the duty of a person authorised to receive and

count postal votes in relation to a meeting:


(a) to collect together all postal votes received by him

or her; and

(b) in relation to each resolution to be voted on—

(i) to count the number of creditors or creditors

belonging to a class of creditors, as the

case may be, voting in favour of the

resolution and determine the total amount

of the debts owed by the company to

those creditors; and

(ii) to count the number of creditors or creditors

belonging to a class of creditors, as the

case may be, voting against the resolution

and determine the total amount of the

debts owed by the company to those

creditors; and

(c) to sign a certificate—

(i) that he or she has carried out the duties set

out in paragraphs (a) and (b); and

(ii) stating the results of the counts and

determinations required by paragraph (b);

and

(d) to ensure that the certificate required by paragraph

(c) is presented to the person chairing or

convening the meeting.

(2) A certificate given under sub-clause (1) in relation to the

postal votes cast in respect of a meeting of creditors must be

annexed to the minutes of the meeting.

25. Duty of chairperson – If a vote is taken at a meeting

held under clause 3(a) or (b) on a resolution on which postal

votes have been cast, the person chairing the meeting must

include the results of voting by all creditors who have sent in a

voting paper duly marked as for or against the resolution.

SCHEDULE 13

(Sections 3 (i)and 211, Clauses 13(2) and 14(1) of Schedule

14, and

Clause 3 of Schedule 16)

POWERS, FUNCTIONS, AND LIABILITIES OF

LIQUIDATORS


CONTENTS

PART 1

PRELIMINARY

PROVISIONS

1. Power to appoint 2 or more

liquidators

2. Liquidators to act jointly

3. When liquidator not required

to act

PART 2

POWERS OF LIQUIDATORS

4. Liquidator controls

company’s assets

5. General powers

6. Specific powers

7. Liquidator may enforce

liability of

shareholders

8. Liquidator may disclaim

onerous property

9. Liquidator may be required

to elect whether to disclaim

onerous property

PART 3

DUTIES OF LIQUIDATORS

10. Principal duties of liquidators

11. Restriction on purchase of

company’s assets by

liquidator


goods or services from

persons connected with

liquidation

13. Deposit of company funds

14. Investment of funds

15. Duties in relation to accounts

16. Meaning of failure to comply

17. Failure to comply

18. Consequences of non-

compliance with Court order

19. Prohibition order

20. Who may apply for orders

under clauses 17 to 19

21. Court order under clauses 17

to 19: general

PART 4

COURT SUPERVISION OF

LIQUIDATORS

22. Court orders

23. Court orders are additional to

other Court powers

24. Defence to act in accordance

with Court directions

PART 1


1. Power to appoint 2 or more liquidators – For the

purposes of this Act, the power to appoint a liquidator of a

company includes the power to appoint 2 or more persons as

liquidators of a company.

2. Liquidators to act jointly – If 2 or more persons are

appointed as liquidators of a company, those persons must act

jointly unless the special resolution of shareholders, the

resolution of the directors of the company, or the order of the

Court appointing the liquidators states that the liquidators may

exercise their powers individually.

3. When liquidator not required to act – Despite

anything in this Act:

(a) except if the charge is surrendered or taken to be

surrendered or redeemed, a liquidator may, but is

not required to, carry out any duty or exercise

any power in relation to property that is subject

to a charge:

(b) the Official Assignee is not required, without the

consent of the Minister, to carry out any duty or

exercise any power in connection with the

liquidation if, to do so, would or would be likely

to involve incurring any expense if -

(i) a company is put into liquidation under

section 217 of the Act; and

(ii) the Official Assignee is the liquidator of the

company; and

(iii) the company has no assets available for

distribution to creditors of the company.

PART 2

POWERS OF LIQUIDATORS

4. Liquidator controls company’s assets – With effect

from the commencement of the liquidation of a company, the

liquidator has custody and control of the company’s assets.


5. General powers – A liquidator has the powers:

(a) necessary to carry out the functions and duties of a

liquidator under this Act; and

(b) conferred on a liquidator by the Act.

6. Specific powers – Without limiting clause 5, a

liquidator of a company has power to:

(a) commence, continue, discontinue, and defend legal

proceedings;

(b) the extent necessary for the liquidation, carry on the

business of the company;

(c) appoint a solicitor;

(d) pay any class of creditors in full;

(e) make a compromise or an arrangement with

creditors or persons claiming to be creditors or

who have or allege the existence of a claim

against the company, whether present or future,

actual or contingent, or ascertained or not;

(f) compromise calls and liabilities for calls, debts, and

liabilities capable of resulting in debts, and

claims, present or future, actual or contingent,

ascertained or not, subsisting or supposed to

subsist between the company and any person and

all questions relating to or affecting the assets or

the liquidation of the company, on such terms as

may be agreed, and take security for the

discharge of any such call, debt, liability, or

claim, and give a complete discharge;

(g) sell or otherwise dispose of the property of the

company;

(h) act in the name and on behalf of the company and

enter into deeds, contracts, and arrangements in

the name and on behalf of the company;

(i) prove, rank, and claim in the bankruptcy or

insolvency of a shareholder for any balance

against that person’s estate, and to receive

dividends in the bankruptcy or insolvency, as a

separate debt due from the bankrupt or insolvent

and rateably with the other separate creditors;


(j) draw, accept, make, and endorse a bill of exchange

or promissory note in the name and on behalf of

the company, with the same effect as if the bill or

note had been drawn, accepted, made, or

endorsed by or on behalf of the company in the

course of its business;

(k) borrow money on the security of the company’s

assets;

(l) take out, in his or her name as liquidator, letters of

administration to a deceased shareholder, and to

do in that name any other act necessary for

obtaining payment of money due from a

shareholder or his or her estate, which cannot be

conveniently done in the name of the company.

In all such cases the money due is, for the

purpose of enabling the liquidator to take out the

letters of administration or recover the money,

taken to be due to the liquidator;

(m) call a meeting of creditors or shareholders for—

(i) the purpose of informing creditors or

shareholders of progress in the

liquidation;

(ii) the purpose of ascertaining the views of

creditors or shareholders on any matter

arising in the liquidation;

(iii) such other purpose connected with the

liquidation as the liquidator thinks fit;

(n) appoint an agent to do anything that the liquidator is

unable to do.

7. Liquidator may enforce liability of shareholders – A

liquidator may enforce the liability of the shareholder or former

shareholder in respect of any shares issued to the shareholder or

former shareholder.

8. Liquidator may disclaim onerous property – (1)

Subject to clause 9, a liquidator may disclaim onerous property

even though the liquidator has taken possession of it, tried to

sell it, or otherwise exercised rights of ownership in relation to

it.

(2) A disclaimer:


(a) brings to an end on and from the date of the

disclaimer the rights, interests, and liabilities of

the company in relation to the property

disclaimed;

(b) does not, except so far as necessary to release the

company from a liability, affect the rights or

liabilities of any other person.

(3) A liquidator who disclaims onerous property must,

within 10 working days of the disclaimer, give notice in writing

of the disclaimer to a person whose rights are, to the knowledge

of the liquidator, affected by the disclaimer.

(4) A person suffering loss or damage as a result of a

disclaimer under this clause may:

(a) claim as a creditor of the company for the amount

of the loss or damage, taking account of the

effect of an order made by the Court under

paragraph (b);

(b) apply to the Court for an order that the disclaimed

property be delivered to or vested in that person.

(5) The Court may make an order under subclause (4)(b) if

it is satisfied that it is just that the property should be vested in

the applicant.

9. Liquidator may be required to elect whether to

disclaim onerous property – A liquidator is not entitled to

disclaim onerous property if:

(a) a person whose rights would be affected by the

disclaimer of onerous property gives the

liquidator notice in writing requiring the

liquidator to elect whether to disclaim the

onerous property before the close of a date

specified in the notice, which must be at least 20

working days after the date on which the notice

is received by the liquidator; and

(b) the liquidator does not disclaim the onerous

property before the close of that date.

PART 3

DUTIES OF LIQUIDATORS


10. Principal duties of liquidator – The principal duties of

a liquidator of a company are, in a reasonable and efficient

manner:

(a) to take possession of, protect, realise, and distribute

the assets, or the proceeds of the realisation of

the assets, of the company to its creditors in

accordance with the Act; and

(b) if there are surplus assets remaining, to distribute

them, or the proceeds of the realisation of the

surplus assets, under section 251 of the Act.

11. Restriction on purchase of company’s assets by

liquidator – (1) Subject to the leave of the Court, a liquidator

must not, either directly or indirectly, become a purchaser of

any part of the company’s assets.

(2) The Court may set aside any purchase made contrary to

this clause, and grant any consequential relief that it thinks fit.

(3) The Court may give its leave on any conditions that it

thinks fit.

12. Restriction on purchase of goods or services from

persons connected with liquidator – (1) Subject to the leave

of the Court, a liquidator must not purchase goods or services

for the purposes of the liquidation from any person whose

connection with him or her would result in the liquidator

directly or indirectly obtaining any benefit arising out of the

transaction.

(2) The Court may disallow or recover any benefit made

contrary to this clause.


thinks fit.

13. Deposit of company funds – A liquidator must deposit

the funds of a company under his or her administration in a

bank account to the credit of the company, or in a trust account

at a bank on trust for the benefit of the company.

14. Investment of funds – (1) Despite clause 13, in any

liquidation all or any part of the balance standing to the credit of

the company in any bank account or trust account kept by the

liquidator, and not required for the time being to meet claims


made against the company, may be invested in any bank or in

any Government securities or, if authorised by the Court, any

other securities.

(2) All dividends, interest, and other profits from

investments must immediately on being received be paid into

the bank account or trust account kept by the liquidator under

clause 13.

15. Duties in relation to accounts – (1) Subject to sub-

clause (2), the liquidator of a company must:

(a) keep accounts and records of the liquidation and

permit those accounts and records, and the

accounts and records in the company, to be

inspected by—

(i) any appointed liquidation committee, unless

the liquidator believes on reasonable

grounds that inspection would be

prejudicial to the liquidation; and

(ii) if the Court so orders, a creditor or

shareholder; and

(b) retain the accounts and records of the liquidation

and of the company for not less than 1 year after

completion of the liquidation, and

(c) if a liquidator carries on the business of the

company, keep accounting records for the

carrying on of the business of the company that

comply with section 129 of the Act to the extent

that that section is applicable.

(2) The Registrar may, whether before or after the

completion of the liquidation:

(a) authorise the disposal of any accounts and records;

and

(b) require any accounts or records to be retained for

longer than 1 year after the completion of the

liquidation.

16. Meaning of failure to comply – In clauses 17 to 19,

failure to comply means a failure of a liquidator to comply with

a relevant duty arising:

(a) under the Act or any other Act or rule of law or

rules of Court; or


(b) under any order or direction of a Court other than

an order to comply made under clause 17.

17. Failure to comply – If the Court is satisfied that there

is, or has been, a failure to comply, the Court may:

(a) relieve the liquidator of the duty to comply wholly

or in part; or

(b) without prejudice to any other remedy that may be

available in relation to a breach of duty by the

liquidator, order the liquidator to comply to the

extent specified in the order.

18. Consequences of non-compliance with Court order –

A Court may, in relation to a person who fails to comply with

an order made under clause 17, or is or becomes disqualified to

become or remain a liquidator:

(a) remove the liquidator from office; or

(b) order that the person may be appointed and act, or

may continue to act, as liquidator, despite being

disqualified to act as liquidator.

19. Prohibition order – (1) The Court must make, in

relation to a person, a prohibition order for a period not

exceeding 5 years if it is shown to the satisfaction of a Court

that the person is unfit to act as liquidator by reason of:

(a) persistent failures to comply; or

(b) the seriousness of a failure to comply.

(2) A person to whom a prohibition order applies must not:

(a) act as a liquidator in a current or other liquidation;

or

(b) act as a receiver in a current or other receivership;

or

(c) act as an administrator of a company under

Division 1 of Part 9.

(3) The following is, in the absence of special reasons to the

contrary, evidence of persistent failures to comply for the

purposes of this clause:

(a) evidence that on 2 or more occasions within the

preceding 5 years, a Court has made an order to

comply under this clause in respect of the same

person;


(b) evidence that on 2 or more occasions within the

preceding 5 years, an application for an order to

comply under this clause has been made in

respect of the same person and that in each case

the person has complied after the making of the

application and before the hearing.

(4) A copy of a prohibition order must, within 10 working

days of the order being made, be delivered by the applicant to

the Official Assignee for Samoa, who must keep it on a file

indexed by reference to the name of the liquidator concerned.

20. Who may apply for orders under clauses 17 to 19 –

(1) An application for an order under this Part may be made by:

(a) a liquidator;

(b) a person seeking appointment as a liquidator;

(c) a liquidation committee;

(d) a creditor, shareholder or a director of the company

in liquidation;

(e) a receiver appointed in relation to property of the

company in liquidation;

(f) an Official Assignee.

(2) No application may be made to a Court by a person

other than a liquidator in relation to a failure to comply unless

notice of the failure to comply has been served on the liquidator

not less than 5 working days before the date of the application

and, as at the date of the application, there is a continuing

failure to comply.

21. Court orders under clauses 17 to 19: general – In

making an order under this clause a Court may, if it thinks fit:

(a) make an order extending the time for compliance;

or

(b) impose terms or conditions; or

(c) make an ancillary order.

PART 4

COURT SUPERVISION OF LIQUIDATIONS

22. Court orders – On the application of the liquidator, a

liquidation committee, or, with the leave of the Court, a


creditor, shareholder, or director of a company in liquidation,

the Court may:

(a) give directions in relation to any matter arising in

connection with the liquidation;

(b) confirm, reverse, or modify an act or decision of the

liquidator;

(c) order an audit of the accounts of the liquidation;

(d) order the liquidator to produce the accounts and

records of the liquidation for audit and to provide

the auditor with such information concerning the

conduct of the liquidation as the auditor requests:

(e) in respect of any period, review or fix the

remuneration of the liquidator at a level that is

reasonable in the circumstances;

(f) to the extent that an amount retained by the

liquidator as remuneration is found by the Court

to be unreasonable in the circumstances, order

the liquidator to refund the amount;

(g) declare whether or not the liquidator was validly

appointed or validly assumed custody or control

of property;

(h) make an order concerning the retention or the

disposition of the accounts and records of the

liquidation or of the company.

23. Court orders are additional to other Court powers –

The powers given by clause 22:

(a) are in addition to any other powers a Court may

exercise in its jurisdiction relating to liquidators

under the Act; and

(b) may be exercised—

(i) in relation to a matter occurring either

before or after the commencement of the

liquidation or the removal of the

company from the Samoa register; and

(ii) whether or not the liquidator has ceased to

act as liquidator when the application or

the order is made.

24. Defence to act in accordance with Court direction –

(1) Subject to sub-clause (2), a liquidator is entitled to rely on


having so acted as a defence to a claim in relation to anything

done or not done under the direction if the liquidator has:

(a) obtained a direction of a Court with respect to a

matter connected with the exercise of the powers

or functions of liquidator; and

(b) acted under the direction.

(2) A Court may, on the application of any person, order

that, by reason of the circumstances in which a direction by the

Court was obtained, the liquidator does not have the protection

given by sub-clause (1).

SCHEDULE 14

(Sections 3(i), 212 and 213(2)(a))

OFFICE OF LIQUIDATOR

CONTENTS

PART 1

RESTRICTIONS ON

APPOINTMENT OF

LIQUIDATORS

1 Who may not be appointed

or act as liquidator 2 Validity of acts of liquidators 3 Person must consent to being

appointed liquidator 4 Court may declare whether

liquidator validly appointed

PART 2

VACANCY IN OFFICE OF

LIQUIDATOR

5 Vacancy in office of

liquidator

6 How liquidator may resign

7 Court may review

appointment of successor

8 Vacancy not caused by

resignation

9 Appointment of liquidator

until successor appointed

10 Appointment of successor by

Court

11 Notice of appointment given

by successor 12 Vacating liquidator’s

successor to be helped 13 Liquidator ceases to hold

office on completion of

liquidation

PART 3

LIQUIDATORS’

REMUNERATION

14 Remuneration of liquidators

15 Expenses and remuneration

payable out of assets of

company

_________

PART 1

RESTRICTIONS ON APPOINTMENT OF

LIQUIDATORS


1. Who may not be appointed or act as liquidator –

None of the following may be appointed or act as a liquidator of

a company:

(a) a corporation;

(b) a person who is under 21 years of age;

(c) a creditor of the company;

(d) a person who has, within the 2 years immediately

before the beginning of the liquidation, been a

shareholder, director, auditor, or receiver of the

company or of a related company;

(e) an un-discharged bankrupt;



(g) a person who would, but for the repeal of the

Companies Act 1955, be prohibited from being a

director or promoter, or being concerned or

taking part in the management, of a company

within the meaning of that Act;

(h) a person who is prohibited from being a director or

promoter, or being concerned or taking part in

the management, of a company under the Act;

(i) a person who is prohibited from acting as an

administrator under the Act;

(j) a person who is prohibited from acting as a receiver

under the Receiverships Act 2006.

2. Validity of acts of liquidators – (1) The acts of a

person as a liquidator are valid even though that person may not

be qualified to act as a liquidator.

(2) No defect or irregularity in the appointment of a

liquidator invalidates any act done by him or her in good faith.

3. Person must consent to being appointed liquidator –

A person, other than an Official Assignee, must not be

appointed as liquidator of a company unless:

(a) the person has consented in writing to the

appointment; and

(b) as at the time of the appointment, the person has not

withdrawn the consent.


4. Court may declare whether liquidator validly

appointed – (1) If there is doubt on a specific ground about

whether the appointment of a person as liquidator of a company

is valid, the person, the company, or any of the company’s

creditors may apply to the Court for an order under sub-clause

(2).

(2) The Court may, on application, make an order declaring

whether or not the appointment was valid on the ground

specified in the application or on some other ground.

PART 2

VACANCY IN OFFICE OF LIQUIDATOR

5. Vacancy in office of liquidator – The office of

liquidator becomes vacant if the person holding office resigns,

dies, or is or becomes disqualified to act as liquidator.

6. How liquidator may resign – A person may resign

from the office of liquidator by appointing another person as his

or her successor and sending or delivering notice in writing of

the appointment of his or her successor to the Registrar for

registration.

7. Court may review appointment of successor – The

Court may, on the application of the company, or a shareholder

or other entitled person, or a director or creditor of the

company, review the appointment of a successor to a liquidator

and may appoint any person who could be appointed as

liquidator under section 215, 216, or 218 of the Act, as the case

may be, to be the liquidator of the company.

8. Vacancy not caused by resignation – If, for any reason

other than resignation, a vacancy occurs in the office of

liquidator, written notice of the vacancy must immediately be

sent or delivered to the Official Assignee by the person vacating

office or, if that person is unable to act, by his or her personal

representative.

9. Appointment of liquidator until successor appointed

– If, as the result of the vacation of office by a liquidator, other

than the Official Assignee, no person is acting as liquidator, the


Official Assignee may appoint a person to act as liquidator until

a successor is appointed under this clause.

10. Appointment of successor by Court – If a vacancy

occurs in the office of the liquidator, or a liquidator has been

appointed under clause 9, as the case may be, the Court may, on

the application of the company, or a shareholder or other

entitled person, or a director or creditor of the company, or the

Official Assignee for Samoa, appoint any person who could be

appointed as liquidator under section 215, 216, or 218 of the

Act, as the case may be, to be the liquidator of the company.

11. Notice of appointment given by successor – A

liquidator appointed under clause 10 must, within 10 working

days of being appointed or being notified of his or her

appointment, deliver a notice of his or her appointment to the

Registrar for registration.

12. Vacating liquidator – (1) A person vacating the office

of liquidator must, if practicable, provide such information and

give such assistance to that person’s successor as he or she

reasonably requires in taking over the duties of liquidator.

(2) A person vacating the office of liquidator must

immediately, or within any reasonable time that may be

specified by that person’s successor, deliver to his or her

successor the following things that are in his or her possession

or under his or her control:

(a) any records or documents of the company;

(b) other property of the company;

(c) all claims;

(d) accounts and records of the liquidation.

(3) A person vacating the office of liquidator is entitled to

deduct fees and expenses properly incurred by him or her in

carrying out the duties and exercising the powers of the

liquidator and his or her remuneration as liquidator as provided

for in the Act, and such fees, expenses, and remuneration rank

in priority to the fees, expenses, and remuneration of that

person’s successor.

(4) If there are no available assets of the company from

which to pay the vacating liquidator’s fees, expenses, and

remuneration at the time the person vacates the office of


liquidator, then the new liquidator must pay such fees,

expenses, and remuneration from the assets of the company as

soon as is practicable.

13. Liquidator ceases to hold office on completion of

liquidation – (1) A liquidator ceases to hold office on the

completion of the liquidation.

(2) Sub-clause (1) does not limit Part 3 or 4 of Schedule 13.

PART 3

LIQUIDATORS’ REMUNERATION

14. Remuneration of liquidators – (1) Subject to clause

22(f) of Schedule 13, A liquidator, not being an Official

Assignee, appointed under section 215 or 216 of the Act is

entitled to charge reasonable remuneration for carrying out his

or her duties and exercising his or her powers as liquidator.

(2) Unless the Court otherwise orders, an Official Assignee

who is appointed a liquidator under section 214 of the Act and a

liquidator appointed under section 218 of the Act must charge

remuneration either:

(a) of an amount equal to the amount fixed under

regulations made under the Act; or

(b) at, or in accordance with, such rate or rates as may

be prescribed under regulations made under the

Act.

(3) Subject to the Act, a liquidator must not make any

arrangement for, or accept from any person, any benefit beyond

the remuneration to which he or she is entitled as liquidator.

(4) A liquidator must not make any arrangement for giving

up, whether in whole or in part, his or her remuneration to any

person.

(5) If a liquidator receives remuneration for his or her

services as such, no payment is allowed on his or her accounts

in respect of the performance by any other person of the

ordinary duties which are required by the Act to be performed

by himself or herself.

(6) If a liquidator is a solicitor or chartered accountant, he or

she may contract that the remuneration for his or her services as

liquidator includes all professional services.


15. Expenses and remuneration payable out of assets of

company – The expenses and remuneration of the liquidator are

payable out of the assets of the company.

SCHEDULE 15

(Section3(i))

EFFECT OF LIQUIDATION

CONTENTS

PART 1

PRELIMINARY

PROVISIONS

1. Company’s rules not to be

altered

PART 2

EFFECT ON COMPANY’S

OFFICERS AND

SHAREHOLDERS, ETC

2. Functions and powers of

company’s directors

suspended

3. Effect on company’s

shareholders

PART 3


4 Legal proceedings not to be

commenced or continued

5 Effect on proceedings

commenced before the

commencement of

liquidation

6 No enforcement of rights

over company’s property

7 Restriction on rights of

creditors to complete

execution, distraint,

attachment

8 Duties of officer in execution

process

PART 4

EFFECT ON CERTAIN

CONDUCT

9 Certain conduct prohibited

__________

PART 1


1. Company’s rules not to be altered – With effect from

the commencement of the liquidation of a company, the rules of

the company cannot be altered.

PART 2

EFFECT ON COMPANY’S OFFICERS AND

SHAREHOLDERS, ETC


2. Functions and powers of company’s directors

suspended – With effect from the commencement of the

liquidation of a company, the directors remain in office but

cease to have powers, functions, or duties other than those

required or permitted to be exercised by the Act.

3. Effect on company’s shareholders – With effect from

the commencement of the liquidation of a company:

(a) unless the Court orders otherwise, a share in the

company must not be transferred;

(b) an alteration must not be made to the rights or

liabilities of a shareholder or former shareholder

of the company;

(c) a shareholder must not exercise a power under the

rules of the company or the Act, except for the

purposes of the Act.

PART 3


4. Legal proceedings not to be commenced or continued

– With effect from the commencement of the liquidation of a

company, a person must not, unless the liquidator agrees or the

Court orders otherwise, commence or continue legal

proceedings against the company or in relation to its property.

5. Effect on proceedings commenced before

commencement of liquidation – (1) At any time after the

making of an application to the Court to appoint a liquidator of

a company and before a liquidator is appointed, the company or

any creditor or shareholder of the company may:

(a) for any application or proceeding against the

company that is pending in the Court or Court of

Appeal, apply to the Court or Court of Appeal,

as the case may be, for a stay of the application

or proceeding;

(b) for any other application or proceeding pending

against the company in any Court or tribunal,

apply to the Court to restrain the application or

proceeding.


(2) The Court or Court of Appeal may stay or restrain the

application or proceedings on any terms that it thinks fit.

6. No enforcement of rights over company’s property –

(1) With effect from the commencement of the liquidation of a

company, a person must not, unless the liquidator agrees or the

Court orders otherwise, exercise or enforce, or continue to

exercise or enforce, a right or remedy over or against property

of the company.

(2) Nothing in sub-clause (1) or in clause 4 affects the right

of a secured creditor to take possession of, realise or otherwise

deal with, property of the company over which that creditor has

a charge.

7. Restriction on rights of creditors to complete

execution, distraint, or attachment – (1) Subject to sub-

clauses (2) and (3), a creditor is not entitled to retain the benefit

of any execution process, distress, or attachment over or against

the property of a company unless the execution process,

distress, or attachment is completed before:

(a) the passing of a special resolution appointing a

liquidator of the company, or the date on which

the creditor had notice of the calling of a meeting

at which such a resolution was proposed,

whichever occurs first; or

(b) the passing of a resolution by the directors of a

company appointing a liquidator of the

company, or the date on which the creditor had

notice of the calling of a meeting at which such a

resolution was proposed, whichever occurs first;

or

(c) the making of an application to the Court to appoint

a liquidator of the company.

(2) Despite sub-clause (1):

(a) a person who, in good faith, purchases property of a

company from a court officer charged with an

execution process acquires a good title as against

the liquidator of the company:

(b) a person who, in good faith, purchases property of a

company on which distress has been levied


acquires a good title as against the liquidator of

the company.

(3) The Court may set aside the application of sub-clause (1)

to the extent and on any conditions that the Court thinks fit.

(4) For the purposes of this clause:

(a) an execution or distraint against personal property

is completed by seizure and sale;

(b) an attachment of a debt is completed by receipt of

the debt;

(c) an execution against land is completed by sale, and,

in the case of an equitable interest, by the

appointment of a receiver.

(5) Nothing in this clause limits or affects Part 2 of

Schedule 17.

8. Duties of court officer in execution process – (1) A

court officer must, on being required by a liquidator of a

company to do so, deliver or transfer the company’s property

and any money received in satisfaction or partial satisfaction of

an execution or paid to avoid a sale of the property, as the case

may be, to the liquidator if:

(a) the property has been taken in an execution process;

and

(b) before completion of the execution process the

court officer charged with the execution process

receives notice that the liquidator of the company

has been appointed.

(2) The costs of the execution process are a first charge on

any property or money delivered or transferred to the liquidator

under sub-clause (1) and the liquidator may sell all or some of

the property to satisfy that charge.

(3) The court officer must retain the proceeds of sale or the

money paid for 10 working days if:

(a) property of a company is sold in an execution

process in respect of a judgment for a sum

exceeding $500; or

(b) money is paid to the court officer charged with the

execution process to avoid a sale of the property.

(4) The court officer must deduct from the amount the costs

of the execution process and pay the balance to the liquidator if:


(a) within the period of 10 working days, the court

officer has notice of—

(i) the calling of a meeting at which a special

resolution is proposed to appoint a

liquidator; or

(ii) the calling of a meeting of the directors at

which a resolution is proposed to appoint

a liquidator or of a meeting of the

directors at which the appointment of a

liquidator is to be considered; or

(iii) the making of an application to the Court to

appoint a liquidator; and

(b) the company is put into liquidation.

(5) A liquidator to whom money is paid under sub-clause

(4) is entitled to retain it as against the execution creditor.

(6) The Court may set aside the application of this clause to

the extent and on any conditions that it thinks fit.

PART 4

EFFECT ON CERTAIN CONDUCT

9. Certain conduct prohibited – (1) If a company is in

liquidation, or an application has been made to the Court for an

order that a company be put into liquidation, as the case may be,

no person may:

(a) leave Samoa with the intention of—

(i) avoiding payment of money due to the

company; or

(ii) avoiding examination in relation to the

affairs of the company; or

(iii) avoiding compliance with an order of the

Court or some other obligation under this

Part in relation to the affairs of the

company; or

(b) conceal or remove property of the company with

the intention of preventing or delaying the

liquidator taking custody or control of it; or

(c) destroy, conceal, or remove records or other

documents of the company.


(2) A person who does not comply with sub-clause (1)



exceeding 2 years, or both.

SCHEDULE 16

(Sections3(i)and 245(1)(a))

LIQUIDATION COMMITTEES

CONTENTS

PART 1

LIQUIDATION COMMITTEE

1. Appointment of members

2. Membership

3. Powers

4. Application of company’s

rules

5. Inability to act


company’s assets by

liquidation committee

7. Members not entitled to

benefit from dealings with

company’s assets

8. No remuneration

9. Disallowance or recovery of

benefits or payments

PART 2

PROCEEDINGS AT

MEETINGS

10. Frequency of meetings

11. Majorities

12. Resignation

13. Office becoming vacant

14. Removal of member

15. Vacancy filled

16. Committee with vacancy

may act

___________

PART 1

LIQUIDATION COMMITTEE

1. Appointment of members – (1) The members of a

liquidation committee chosen by a meeting of creditors or of

shareholders take office immediately.

(2) The liquidator must refer the matter to the Court, and the

Court may make any decision that it thinks fit if there is a

difference between the decisions of meetings of creditors and

meetings of shareholders on:

(a) the question of appointing a liquidation committee;

or

(b) the membership of a liquidation committee.


2. Membership – A liquidation committee must consist of

not fewer than 3 persons who are:

(a) creditors or shareholders; or

(b) persons holding general powers of attorney from

creditors or shareholders; or

(c) authorised directors or representatives of companies

which are creditors or shareholders of the

company in liquidation.

3. Powers – A liquidation committee has the power to:

(a) call for reports from the liquidator on the progress

of the liquidation; and

(b) call a meeting of creditors or of shareholders; and

(c) apply to the Court under Part 3 or 4 of Schedule 13;

and

(d) assist the liquidator as appropriate in the conduct of

the liquidation.

4. Application of company’s rules – A meeting of

shareholders called under clause 3(b) must be held in

accordance with the company’s rules (except that the liquidator

has power to give notice of a meeting of shareholders and to act

as, or appoint, the chairperson of the meeting).

5. Inability to act – If, by reason of vacancies in a

liquidation committee, the committee is unable to act, the

liquidator must call attention to the situation in the next 6

monthly report required to be prepared and sent under section

248 of the Act.

6. Restriction on purchase of company’s assets by

liquidation committee – (1) Subject to the leave of the Court, a

member of a liquidation committee of a company must not,

either directly or indirectly, become a purchaser of any part of

the company’s assets.

(2) The Court may set aside any purchase made contrary to

this regulation, and grant any consequential relief that it thinks

fit.


thinks fit.

Companies Act 2001

7. Members not entitled to benefit from dealings with

company’s assets – (1) Subject to the leave of the Court, no

member of a liquidation committee may directly or indirectly be

entitled to:

(a) derive any benefit from any transaction arising out

of the assets of the company; or

(b) receive out of the assets of the company any

payment for services rendered by him or her in

connection with the administration of the assets,

or for any goods supplied by him or her to the

liquidator for or on account of the company; or

(c) directly or indirectly become the purchaser of any

part of the company’s assets.

(2) If the leave of the Court is sought under sub-clause (1) in

respect of any payment for services, the leave may be given

only if the services performed are of a special nature and the

order must specify the nature of the services for which leave is

given.

8. No remuneration – Except by the leave of the Court, no

remuneration may, under any circumstances, be paid to a

member of a liquidation committee for services rendered by him

or her in the discharge of the duties attaching to his or her office

as a member of the committee.

9. Disallowance or recovery of benefits or payments –

(1) The Court may disallow or recover any benefit or payment

made contrary to clause 7 or 8.

(2) The Court may give leave under clause 7 or 8 on any

conditions that it thinks fit.

PART 2

PROCEEDINGS AT MEETINGS

10. Frequency of meetings – (1) The committee must meet

at the times as it appoints.

(2) The liquidator or a member of the committee may also

call a meeting of the committee as and when necessary.


11. Majorities – The committee may act by a majority of its

members present at a meeting, but may not act unless a majority

of the committee are present.

12. Resignation – A member of the committee may resign

by notice in writing signed by the member and delivered to the

liquidator.

13. Office becoming vacant – The office of a member of

the committee becomes vacant if the member:

(a) becomes bankrupt; or

(b) compounds or arranges with his or her creditors; or

(c) is absent from 3 consecutive meetings of the

committee without the leave of those members

who together with that member represent the

creditors or shareholders, as the case may be.

14. Removal of member – (1) A member of the committee

may be removed by a resolution:

(a) carried at a meeting of creditors if the member

represents creditors; or

(b) carried at a meeting of shareholders if the member

represents shareholders.

(2) At least 5 working days’ notice of the resolution must be

given, which states the object of the meeting.

15 Vacancy filled – A vacancy in the committee may be

filled by the appointment to the committee of:

(a) a creditor or shareholder, as the case may be; or

(b) a person holding a general power of attorney from,

or being an authorised director or representative

of, a company which is a creditor or shareholder,

as the case may be.

16. Committee with vacancy may act – The continuing

members of the committee, if not less than 2, may act even

though a vacancy exists in the committee.

SCHEDULE 17

(Section3(i))

Companies Act 2001

VOIDABLE TRANSACTIONS AND CHARGES AND

RECOVERIES

IN OTHER CASES

CONTENTS

PART 1

VOIDABLE TRANSACTIONS

AND CHARGES

Division 1 – VOIDABLE

TRANSACTIONS

1. Definitions

2. Voidable transactions

Division 2 – VOIDABLE

CHARGERS

3. Definitions

4. Voidable charges

5. Exception: certain kinds of

substituted charge

6. Exception: charge that

secures unpaid purchase

price

7. Payments received by

secured party

Division 3 – PROCEDURE

FOR SETTING ASIDE

VOIDABLE TRANSACTIONS

AND CHARGES

8. Procedure

9. Other orders

10. Additional provisions

relating to setting aside

transactions and charges

PART 2

RECOVERY IN OTHER

CASES

Division 1 – TRANSACTIONS

AT UNDERVALUE

11. Definitions

12. Transactions at undervalue

Division 2 – TRANSACTIONS

FOR EXCESSIVE OR

INADEQUATE

CONSIDERATION WITH

DIRECTORS, ETC

13. Definitions

14. Transactions for excessive

consideration with directors,

etc

15. Transactions for inadequate

consideration with directors,

etc

Division 3 – COURT MAY SET

ASIDE CERTAIN

SECURITIES AND CHARGES

16. Court may set aside certain

securities and charges

17. Certain securities exempted

18. Other orders, etc

Division 4 –

CONTRIBUTIONS FOR NOT

KEEPING PROPER

ACCOUNTION RECORDS

19. Contribution for not keeping

proper accounting records

20. When Court may not make

declaration under clause 19

Division 5 – COURT MAY

REQUIRE PERSONS TO

REPAY MONEY OR

RETURN PROPERTY

21. Court may require persons to

repay money or return

property


Division 6 – POOLING OF

ASSETS

22. Pooling of assets of related

companies

23. Guidelines for orders

__________

PART 1

VOIDABLE TRANSACTIONS AND CHARGES

Division 1 – VOIDABLE TRANSACTIONS

1. Definitions – In clause 2:

“restricted period” means:

(a) the period of 6 months before the date of

commencement of the liquidation together with

the period commencing on that date and ending

at the time at which the liquidator is appointed;

and

(b) for a company that was put into liquidation by the

Court, the period of 6 months before the making

of the application to the Court together with the

period commencing on the date of the making of

that application and ending on the date on which,

and at the time at which, the order of the Court

was made; and

(c) the period of 6 months before the making of the

application to the Court together with the period

commencing on the date of the making of that

application and ending on the date and at the

time of the commencement of the liquidation if -

(i) an application was made to the Court to put

a company into liquidation; and

(ii) after the making of the application to the

Court a liquidator was appointed under

section 215 or 216 of the Act; and

(d) for a liquidator appointed under section 187(1)(c) of

the Act, the period of 6 months before the

administration begins together with the period

commencing on that date and ending at the time

the liquidator is appointed;

“specified period” means:

Companies Act 2001

(a) the period of 2 years before the date of




and


Court, the period of 2 years before the making of

the application to the Court together with the



and at the time at which, the order was made;

and

(c) the period of 2 years before the making of the











the Act, the period of 2 years before the




“transaction”, in relation to a company, means:

(a) a conveyance or transfer of property by the

company;

(b) the giving of a security or charge over the property

of the company;

(c) the incurring of an obligation by the company;

(d) the acceptance by the company of execution under

a judicial proceeding;

(e) the payment of money by the company, including

the payment of money under a judgment or order

of a Court.


2. Voidable transactions – (1) A transaction by a

company is voidable on the application of the liquidator if the

transaction:

(a) was made—

(i) at a time when the company was unable to

pay its due debts; and

(ii) within the specified period; and

(b) enabled another person to receive more towards

satisfaction of a debt than the person would

otherwise have received or be likely to have

received in the liquidation.

(2) Sub-clause (1) does not apply if the transaction took

place in the ordinary course of business.

(3) Unless the contrary is proved, a transaction that took

place within the restricted period is presumed to have been

made:

(a) at a time when the company was unable to pay its

debts; and

(b) otherwise than in the ordinary course of business.

(4) In determining whether a transaction took place in the

ordinary course of business, no account is, unless that other

person knew that that was the intent or purpose of the company,

to be taken of any intent or purpose on the part of a company:

(a) to enable another person to receive more towards

satisfaction of a debt than the person would

otherwise receive or be likely to receive in the

liquidation; or

(b) to reduce or cancel the liability, whether in whole

or in part, of another person in respect of a debt

incurred by the company; or

(c) to contribute towards the satisfaction of the

liability, whether in whole or in part, of another

person in respect of a debt incurred by the

company.

Division 2 – VOIDABLE CHARGES





Companies Act 2001



and





the application and ending on the date on which,


was made; and










section 215 or 216; of the Act and







(a) the period of 1 year before the date of




and


Court, the period of 1 year before the making of





was made; and

(c) the period of 1 year before the making of the












the Act, the period of 1 year before the




4. Voidable charges – (1) A charge over any property or

undertaking of a company is voidable on the application of the

liquidator if the charge was given within the specified period,

unless:

(a) the charge secures

(i) money actually advanced or paid; or

(ii) the actual price or value of property sold or

supplied to the company; or

(iii) any other valuable consideration given in

good faith by the grantee of the charge at

the time of, or at any time after, the

giving of the charge; or

(b) immediately after the charge was given, the

company was able to pay its due debts; or

(c) the charge is in substitution for a charge given

before the specified period.

(2) Unless the contrary is proved, a company giving a

charge within the restricted period is presumed to have been

unable to pay its due debts immediately after giving the charge.

5. Exception: certain kinds of substituted charges –

Clause 4(1)(c) does not apply to the extent that:

(a) the amount secured by the substituted charge

exceeds the amount secured by the existing

charge; or

(b) the value of the property subject to the substituted

charge at the date of the substitution exceeds the

Companies Act 2001

value of the property subject to the existing

charge at that date.

6. Exception: charge that secures unpaid purchase

price – Nothing in clause 4 applies to a charge given by a

company that secures the unpaid purchase price of property,

whether or not the charge is given over that property, if:

(a) the charge document is executed not later than 30

days after the sale of the property; or

(b) for the sale of an estate or interest in land, the

charge document is executed not later than 30

days after the final settlement of the sale.

7. Payments received by secured party – For the

purposes of clauses 4(1)(a) and 6, if a charge was given by the

company within the period specified in clause 4, all

payments received by the secured party entitled to the charge

after it was given are taken to have been appropriated so far as

may be necessary:

(a) towards repayment of money actually advanced or

paid by the secured party to the company on or

after the giving of the charge; or

(b) towards payment of the actual price or value of

property sold by the secured party to the

company on or after the giving of the charge; or

(c) towards payment of any other liability of the

company to the secured party in respect of any

other valuable consideration given in good faith

on or after the giving of the charge.

Division 3 – PROCEDURE FOR SETTING ASIDE

VOIDABLE TRANSACTIONS AND CHARGES

8. Procedure – (1) A liquidator who wishes to have a

transaction that is voidable or a charge that is voidable set aside

must:

(a) file in the Court a notice to that effect specifying

the transaction or charge to be set aside and, in

the case of a transaction, the property or value

which the liquidator wishes to recover, and also

the effect of sub-clauses (2), (3), and (4); and


(b) serve a copy of the notice on the other party to the

transaction or the secured creditor entitled to the

charge and on any other person from whom the

liquidator wishes to recover.

(2) A person:

(a) who would be affected by the setting aside of the

transaction or charge specified in the liquidator’s

notice; and

(b) who considers that the transaction or charge is not

voidable,–

may file in the Court a notice objecting to the transaction or

charge being set aside, and serve a copy of that notice on the

liquidator, within 20 working days after the service of the

liquidator’s notice.

(3) Unless a person on whom the liquidator’s notice was

served has given notice under sub-clause (2), the transaction or

charge is set aside on the 20th

working day after the date of

service of the notice.

(4) If 1 or more persons have given notice under sub-clause

(2), the liquidator may apply to the Court for an order that the

transaction or charge be set aside. That application must be

served on any person referred to in sub-clause (1)(b), whether or

not that person gave a notice under sub-clause (2).

9. Other orders – If a transaction or charge is set aside,

the Court may make 1 or more of the following orders:

(a) an order requiring a person to pay to the liquidator,

in respect of benefits received by that person as a

result of the transaction or charge, such sums as

fairly represent those benefits;

(b) an order requiring property transferred as part of the

transaction to be restored to the company;

(c) an order requiring property to be vested in the

company if it represents in a person’s hands the

application, either of the proceeds of sale of

property, or of money, so transferred;

(d) an order releasing, in whole or in part, a charge

given by the company;

(e) an order requiring security to be given for the

discharge of an order made under this clause;

Companies Act 2001

(f) an order specifying the extent to which a person

affected by the setting aside of a transaction or

by an order made under this clause is entitled to

claim as a creditor in the liquidation.

10. Additional provisions relating to setting aside

transactions and charges – (1) The setting aside of a

transaction or an order made under clause 9 does not affect the

title or interest of a person in property that the person has

acquired:

(a) from a person other than the company; and


(c) without knowledge of the circumstances under

which the property was acquired from the

company.

(2) The setting aside of a charge or an order made under

clause 9 does not affect the title or interest of a person in

property that the person has acquired:

(a) as the result of the exercise of a power of sale by

the secured creditor entitled to the charge; and


(c) without knowledge of the circumstances relating to

the giving of the charge.

(3) Recovery by the liquidator of property or its equivalent

value, whether under clause 9 or any other provision of the Act,

or under any other enactment, or in equity or otherwise, may be

denied wholly or in part if:

(a) the person, from whom recovery is sought, received

the property in good faith and has altered his or

her position in the reasonably held belief that the

transfer to that person was validly made and

would not be set aside; and

(b) in the opinion of the Court, it is inequitable to order

recovery or recovery in full.

(4) Nothing in the Land Titles Registration Act 2008

restricts the operation of this clause or clauses 4 to 9.

PART 2

RECOVERY IN OTHER CASES

Division 1 – TRANSACTIONS AT UNDERVALUE




(a) the period of 1 year before the date of




and


Court, the period of 1 year before the making of





was made; and

(c) the period of 1 year before the making of the




time of the commencement of the liquidation

if—







the Act, the period of 1 year before the



the liquidator is appointed, transaction includes

the giving of a guarantee by a company.

12. Transactions at undervalue – (1) A liquidator of a

company may recover from any other party to a transaction any

amount by which the value of the consideration or benefit

provided by the company exceeded the value of the

consideration or benefit received by the company if:

(a) the transaction was entered into by a company

within the specified period; and

Companies Act 2001

(b) the value of the consideration or benefit received by

the company was less than the value of the

consideration provided by the company, or the

company received no consideration or benefit;

and

(c) when the transaction was entered into, the

company—

(i) was unable to pay its due debts; or

(ii) was engaged, or about to engage, in

business for which its financial resources

were unreasonably small; or

(iii) incurred an obligation knowing that the

company would not be able to perform

the obligation when required to do so;

and

(d) when the transaction was entered into, the other

party to the transaction knew or ought to have

known of the matter referred to in paragraph (c).

(2) A liquidator of a company may recover from any other

party to a transaction any amount by which the value of the

consideration or benefit provided by the company exceeded the

value of the consideration or benefit received by the company

if:

(a) the transaction was entered into by a company

within the specified period; and

(b) the value of the consideration or benefit received by

the company was less than the value of the

consideration provided by the company, or the

company received no consideration or benefit;

and

(c) the company became unable to pay its due debts as

a result of the transaction; and

(d) when the transaction was entered into, the other

party to the transaction knew or ought to have

known that the company would become unable

to pay its due debts as a result of the transaction.

Division 2 – TRANSACTIONS FOR INADEQUATE OR

EXCESSIVE CONSIDERATION WITH DIRECTORS,

ETC


13. Definitions – (1) In clause 14, specified period means:





and







was made; and












the Act, the period of 3 years before the




(2) For the purposes of clause 14:

(a) the value of a business or property includes the

value of any goodwill attaching to the business

or property;

(b) without limiting the circumstances in which a

company may be taken to be controlled by a

person, a company is controlled by a person, if

that person can, by exercising a power

exercisable by that person (whether with or

without the consent or concurrence of any other

person), appoint or remove all the directors of

the company, or any number of directors as

Companies Act 2001

together hold a majority of voting rights at a

meeting of directors.

14. Transactions for excessive consideration with

directors, etc., – A liquidator of a company may recover from

the person, relative, company, or related company, as the case

may be, any amount by which the value of the consideration

given for the acquisition of the business, property, or services

exceeded the value of the business, property, or services at the

time of the acquisition if, within the specified period, the

company has acquired a business or property from, or the

services of:

(a) a person who was, at the time of the acquisition, a

director of the company, or a nominee or relative

of or a trustee for, or a trustee for a relative of, a

director of the company; or

(b) a person, or a relative of a person, who, at the time

of the acquisition, had control of the company;

or

(c) another company that was, at the time of the

acquisition, controlled by a director of the

company, or a nominee or relative of or a trustee

for, or a trustee for a relative of, a director of the

company; or

(d) another company that was, at the time of the

acquisition, a related company.

15. Transactions for inadequate consideration with

directors, etc., – A liquidator of a company may recover from

the person, relative, company, or related company, as the case

may be, any amount by which the value of the business,

property, or services, or the value of the shares, at the time of

the disposition, provision, or issue exceeded the value of any

consideration received by the company if, within the specified

period, a company has disposed of a business or property, or

provided services, or issued shares, to:

(a) a person who was, at the time of the disposition,

provision, or issue, a director of the company, or

a nominee or relative of or a trustee for, or a

trustee for a relative of, a director of the

company; or



of the disposition, provision, or issue, had

control of the company; or

(c) another company that was, at the time of the

disposition, provision, or issue, controlled by a

director of the company, or a nominee or relative



(d) another company that, at the time of the disposition,

provision, or issue, was a related company.

Division 3 – COURT MAY SET ASIDE CERTAIN

SECURITIES AND CHARGES

16. Court may set aside certain securities and charges –

(1) The Court may, on the application of the liquidator of a

company, order that a security or charge, or part of it, created by

the company over any of its property in favour of any of the

persons referred to in sub-clause (2) must, so far as any security

on the property is conferred, be set aside as against the

liquidator if:

(a) the company is unable to meet all its debts; and

(b) the Court considers that, having regard to the

circumstances in which the security or charge

was created, the conduct of the person, relative,

company, or related company, as the case may

be, in relation to the affairs of the company, and

any other relevant circumstances, it is just and

equitable to make the order.

(2) The persons referred to in sub-clause (1) are as follows:

(a) a person who was, at the time the security or charge

was created, a director of the company, or a

nominee or relative of or a trustee for, or a

trustee for a relative of, a director of the

company; or


when the security or charge was created, had

control of the company; or

(c) another company that was, when the security or

charge was created, controlled by a director of

the company, or a nominee or relative of or a

Companies Act 2001

trustee for, or a trustee for a relative of, a director

of the company; or

(d) another company, that at the time when the security

or charge was created, was a related company.

17. Certain securities exempted – Clause 16 does not

apply to a security or charge that has been transferred by the

person (person A) in whose favour it was originally created and

has been purchased by another person (whether or not from

person A) if:

(a) at the time of the purchase, the purchaser was not a

person specified in that clause; and

(b) the purchase was made in good faith and for

valuable consideration.

18. Other orders, etc., – (1) The Court may make any other

orders that it thinks proper for the purpose of giving effect to an

order under this clause.

(2) Nothing in the Land Titles Registration Act 2008

restricts the operation of this clause or clauses 16 and 17.

Division 4 – CONTRIBUTION FOR NOT KEEPING

PROPER ACCOUNTING RECORDS

19. Contribution for not keeping proper accounting

records – (1) The Court, on the application of the liquidator,

may, if it thinks it proper to do so, declare that any 1 or more of

the directors and former directors of a company is, or are,

personally responsible, without limitation of liability, for all or

any part of the debts and other liabilities of the company that

the Court may direct if:

(a) the company that is in liquidation and is unable to

pay all its debts has failed to comply with—

(i) section 129 of the Act; or

(ii) section 130 of the Act; and

(b) the Court considers that—

(i) the failure to comply has contributed to the

company’s inability to pay all its debts,

or has resulted in substantial uncertainty

as to the assets and liabilities of the


company, or has substantially impeded

the orderly liquidation; or

(ii) for any other reason it is proper to make a

declaration.

(2) The Court may give any direction it thinks fit for the

purpose of giving effect to the declaration.

(3) The Court may make a declaration under this clause

even though the person concerned is liable to be convicted of an

offence.

(4) An order under this clause is taken to be a final

judgment within the meaning of section 26(f) of the Bankruptcy

Act 1908.

20. When Court may not make declaration under clause

19 – The Court must not make a declaration under clause 19 in

relation to a person if the Court considers that the person:

(a) took all reasonable steps to secure compliance by

the company with clause 19(1)(a); or

(b) had reasonable grounds to believe and did believe

that a competent and reliable person was charged

with the duty of seeing that that provision was

complied with and was in a position to discharge

that duty.

Division 5 – COURT MAY REQUIRE PERSONS TO

REPAY MONEY OR RETURN PROPERTY

21. Court may require persons to repay money or return

property – (1) The Court may, on the application of the

liquidator or a creditor or shareholder, do any of the things set

out in sub-clause (2) if, in the course of the liquidation of a

company, it appears to the Court that a person who has taken

part in the formation or promotion of the company, or a past or

present director, manager, liquidator, administrator, receiver, or

officer of the company, has:

(a) misapplied, or retained, or become liable or

accountable for, money or property of the

company; or

(b) been guilty of negligence, default, or breach of duty

or trust in relation to the company.

(2) The Court may:

Companies Act 2001

(a) inquire into the conduct of the promoter, director,

manager, liquidator, administrator, receiver, or

officer; and

(b) order that person—

(i) to repay or restore the money or property or

any part of it with interest at a rate the

Court thinks just; or

(ii) to contribute such sum to the assets of the

company by way of compensation as the

Court thinks just; or

(c) if the application is made by a creditor, order that

person to pay or transfer the money or property

or any part of it with interest at a rate the Court

thinks just to the creditor.

(3) This clause has effect even though the conduct may

constitute an offence.

(4) An order for payment of money under this clause is

taken to be a final judgment within the meaning of section 26(f)

of the Bankruptcy Act 1908.

Division 6 – POOLING OF ASSETS

22. Pooling of assets of related companies – (1) On the

application of the liquidator, or a creditor or shareholder, the

Court, if satisfied that it is just and equitable to do so, may order

that:

(a) a company that is, or has been, related to the

company in liquidation must pay to the

liquidator the whole or part of any or all of the

claims made in the liquidation:

(b) if 2 or more related companies are in liquidation,

the liquidations in respect of each company must

proceed together as if they were 1 company to

the extent that the Court so orders and subject to

such terms and conditions as the Court may

impose.

(2) The Court may make any other order or give any

directions to facilitate giving effect to an order under sub-clause

(1) that it thinks fit.


23. Guidelines for orders – (1) In deciding whether it is

just and equitable to make an order under clause 22(1)(a), the

Court must consider the following matters:

(a) the extent to which the related company took part in

the management of the company in liquidation;

(b) the conduct of the related company towards the

creditors of the company in liquidation;

(c) the extent to which the circumstances that gave rise

to the liquidation of the company are attributable

to the actions of the related company;

(d) any other matters as the Court thinks fit.

(2) In deciding whether it is just and equitable to make an

order under clause 22(1)(b), the Court must consider the

following matters:

(a) the extent to which any of the companies took part

in the management of any of the other

companies;

(b) the conduct of any of the companies towards the

creditors of any of the other companies;

(c) the extent to which the circumstances that gave rise

to the liquidation of any of the companies are

attributable to the actions of any of the other

companies;

(d) the extent to which the businesses of the companies

have been combined;

(e) any other matters that the Court thinks fit.

(3) The fact that creditors of a company in liquidation relied

on the fact that another company is, or was, related to it is not a

ground for making an order under clause 22.

SCHEDULE 18

(Sections 3(i), 228(2), 250 and 251(5))

CREDITORS’CLAIM

CONTENTS

PART 1

PRELIMINARY

PROVISIONS

1. Application of bankruptcy

rules to liquidation of

insolvent companies

2. Admissible claims

3. Ascertainment of amount of

claim

Companies Act 2001

4. Claim not of ascertained

amount

5. Fines and penalties

6. Claims relating to debts

payable after commencement

of liquidation

7. Claims by unsecured

creditors

PART 2

SECURED CLAIMS

8. Powers of secured creditors

9. Realising secured property

10. Valuation of security

11. Liquidator’s duties on receipt

of claim by secured creditor

12. Liquidator may redeem

security


secured creditor to exercise

powers

14. Offence to make false or

misleading Claim

PART 3

PREFERENTIAL CLAIMS

15. Definitions

16. First priority claims

17. Second priority claims

18. Third priority claims

19. Ranking of claims in clauses

17 and 18

20. When landlord or other

person has distrained on

goods, etc.,

PART 4

MUTUAL CREDIT AND SET-

OFF

21. Definitions

22. Mutual credit and set-off

23. Proof for person who is not

related person

24. Proof for person who is

related person

25. Exceptions for amounts paid

or payable by shareholder

PART 5

SET-OFF UNDER NETTING

AGREEMENT

26. Definitions

27. Application

28. Calculation of netted balance

29. Bilateral netting agreements:

mutuality

30. Recognised multilateral

netting agreements:

mutuality

31. Application of set-off under

Part 4

32. Transactions under netting

agreement

33. Effect of liquidation on

rights under netting

agreement

34. Effect of notice

35. Court may set aside certain

bilateral netting agreements

36. Recognised clearing houses

37. Matters for bank to consider

38. Bank may impose conditions

39. Bank to notify recognised

clearing house

40 Effect of variation or

revocation of declaration

PART 6

MISCELLANEOUS

41. Interest on claims

42. Trade discounts

43. Periodical payments

44. Employees’ claims

45. Notice to creditors to claim

46. Failure to claim by day fixed

for claims

47. Failure to establish priority

by day fixed for claims

48. Dividends in respect of

rejected claims

49. Costs of proceedings relating

to liquidator’s decision on

claims


__________

PART 1


1. Application of bankruptcy rules to liquidation of

insolvent companies – (1) Subject to the Act, the rules in force

under the law of bankruptcy with respect to the estates of

persons adjudged bankrupt apply in the liquidation of a

company that is unable to pay its debts to:

(a) the rights of secured and unsecured creditors; and

(b) claims by creditors; and

(c) the valuation of annuities and future and contingent

liabilities.

(2) All persons who in any such case would be entitled to

make claims and receive payment in whole or in part are so

entitled in the liquidation.

(3) In applying in a liquidation the rules in force under the

law of bankruptcy, a claim made under clause 3 and admitted

by a liquidator is to be treated as if it were a debt proved

pursuant to the requirements of the Bankruptcy Act 1908.

2. Admissible claims – (1) Subject to sub-clause (2), a

debt or liability, present or future, certain or contingent, whether

it is an ascertained debt or a liability for damages, may be

admitted as a claim against a company in liquidation.

(2) Fines, monetary penalties, and costs to which clause 5

applies are not claims that may be admitted against a company

in liquidation.

3. Ascertainment of amount of claim – (1) The amount

of a claim must be ascertained as at the date and time of

commencement of the liquidation.

(2) The amount of a claim based on a debt or liability

denominated in a currency other than the currency of Samoa

must be converted into the currency of Samoa at the rate of

exchange on the date of commencement of the liquidation.

4. Claim not of ascertained amount – (1) If a claim is

subject to a contingency, or is for damages, or, if for some other

Companies Act 2001

reason the amount of the claim is not certain, the liquidator

may:

(a) make an estimate of the amount of the claim; or

(b) refer the matter to the Court for a decision on the

amount of the claim.

(2) On the application of the liquidator, or of a claimant who

is aggrieved by an estimate made by the liquidator, the Court

may determine the amount of the claim that it thinks fit.

5. Fines and penalties – Nothing in this Act limits or

affects the recovery of:

(a) a fine imposed on a company, whether before or

after the commencement of the liquidation of the

company, for the commission of an offence; or

(b) a monetary penalty payable to the State imposed on

a company by a Court, whether before or after

the commencement of the liquidation of the

company, for the breach of any enactment; or

(c) costs ordered to be paid by the company in relation

to proceedings for the offence or breach.

6. Claims relating to debts payable after

commencement of liquidation – (1) A claim in respect of a

debt that, but for the liquidation, would not be payable until a

date that is 6 months, or later than 6 months, after the date of

commencement of the liquidation is to be treated, for the

purposes of this Part, as a claim for the present value of the

debt.

(2) For the purposes of sub-clause (1), the present value of a

debt is to be determined by deducting from the amount of the

debt interest at the prescribed rate for the period from the date

on which the company is put into liquidation to the date when

the debt is due.

(3) For the purpose of this clause prescribed rate means the

prescribed rate for interest on judgment debts within the

meaning of the Supreme Court (Civil Procedure) Rules made

under the Judicature Ordinance 1961.

7. Claims by unsecured creditors – (1) A claim by an

unsecured creditor against a company in liquidation must be

made in the prescribed form and must:


(a) contain full details of the claim; and

(b) identify any documents that evidence or

substantiate the claim.

(2) The liquidator may require the production of a document

referred to in sub-clause (1)(b).

(3) The liquidator:

(a) must, as soon as practicable, either admit or reject a

claim in whole or in part; and

(b) if the liquidator later considers that a claim has been

wrongly admitted or rejected in whole or in part,

may revoke or amend that decision; and

(c) must record in writing any decision made under this

sub-clause.

(4) If a liquidator rejects a claim, whether in whole or in

part, he or she must immediately give notice in writing of the

rejection to the creditor.

(5) The costs of making a claim under sub-clause (1) or

producing a document under sub-clause (2) must be met by the

creditor making the claim.

(6) A person commits an offence and is liable on conviction

to a fine not exceeding 250 penalty units or to imprisonment for

a term not exceeding 2 years, or both if the person:

(a) makes, or authorises the making of, a claim under

this clause that is false or misleading in a

material particular knowing it to be false or

misleading; or

(b) omits, or authorises the omission, from a claim

under this clause of any matter knowing that the

omission makes the claim false or misleading in

a material particular.

PART 2

SECURED CLAIMS

8. Powers of secured creditors – (1) A secured creditor

may:

(a) realise property subject to a charge, if entitled to do

so; or

(b) value the property subject to the charge and claim

in the liquidation as an unsecured creditor for the

balance due, if any; or

Companies Act 2001

(c) surrender the charge to the liquidator for the general

benefit of creditors and claim in the liquidation

as an unsecured creditor for the whole debt.

(2) A secured creditor may exercise the power referred to in

sub-clause (1)(a) whether or not the secured creditor has

exercised the power referred to in sub-clause (1)(b).

9. Realising secured property – A secured creditor who

realises secured property:

(a) may, unless the liquidator has accepted a valuation

and claim by the secured creditor under clause

11, claim as an unsecured creditor for any

balance due after deducting the net amount

realised;

(b) must account to the liquidator for any surplus

remaining from the net amount realised after its

satisfaction of the debt, including interest

payable in respect of that debt up to the time of

its satisfaction, and after making any proper

payments to the holder of any other charge over

the property subject to the charge.

10. Valuation of security – (1) If a secured creditor values

the security and claims as an unsecured creditor for the balance

due, if any, the valuation and any claim must be made in the

prescribed form and:

(a) contain full details of the valuation and any claim;

and

(b) contain full details of the charge including the date

on which it was given; and

(c) identify any documents that substantiate the claim

and the charge.

(2) The liquidator may require production of any document

referred to in sub-clause (1)(c).

11. Liquidator’s duties on receipt of claim by secured

creditor – If a claim is made by a secured creditor under clause

10, the liquidator must:

(a) accept the valuation and claim; or

(b) reject the valuation and claim, in whole or in part,

but—


(i) if a valuation and claim is rejected in whole

or in part, the creditor may make a

revised valuation and claim within 10

working days of receiving notice of the

rejection; and

(ii) the liquidator may, if he or she later

considers that a valuation and claim was

wrongly rejected, in whole or in part,

revoke or amend that decision; and

(c) record in writing any decision made by the

liquidator under this clause.

12. Liquidator may redeem security – The liquidator may,

unless the secured creditor has realised the property, at any

time, redeem the security on payment of the assessed value if

the liquidator:

(a) accepts a valuation and claim under clause 11(a); or

(b) accepts a revised valuation and claim under clause

11(b)(i); or

(c) accepts a valuation and claim on revoking or

amending a decision to reject a claim under

clause 11(b)(ii).

13. Liquidator may require secured creditor to exercise

powers – (1) The liquidator may at any time, by notice in

writing, require a secured creditor, within 20 working days after

receipt of the notice, to:

(a) elect which of the powers referred to in clause 8 the

creditor wishes to exercise; and

(b) if the creditor elects to exercise the power referred

to in clause 8(1)(b) or (c) , exercise the power

within that period.

(2) A secured creditor on whom notice has been served

under sub-clause (1) who fails to comply with the notice, is to

be taken as having surrendered the charge to the liquidator

under clause 8(c) for the general benefit of creditors, and may

claim in the liquidation as an unsecured creditor for the whole

debt.

(3) A secured creditor who has surrendered a charge under

clause 8(1)(c) or who is taken as having surrendered a charge

under sub-clause (2) may, with the leave of the Court or the

Companies Act 2001

liquidator and subject to any conditions that the Court or the

liquidator thinks fit, at any time before the liquidator has

realised the property charged:

(a) withdraw the surrender and rely on the charge; or

(b) submit a new claim under this clause.

14. Offence to make false or misleading claim – A person



exceeding 7 years, or both if the person:

(a) makes, or authorises the making of, a claim under

clause 10 that is false or misleading in a material

particular knowing it to be false or misleading;

or

(b) omits, or authorises the omission, from a claim

under that clause of any matter knowing that the

omission makes the claim false or misleading in

a material particular.

PART 3

PREFERENTIAL CLAIMS

15. Definitions – For the purposes of this Part:

“remuneration”, in respect of a period of holiday or of

absence from work through sickness or other good cause

is to be treated as wages for services rendered to the

company during that period;

“paid annual leave”, in relation to a person, means all sums

payable to that person by the company under section 40

of the Labour and Employment Relations Act 2013, and

includes all sums that by or under any other enactment

or any award, agreement, or contract of service are

payable to that person by the company as holiday pay.

16. First priority claims – The liquidator must first pay, in

the order of priority in which they are listed:

(a) the fees and expenses properly incurred by the

liquidator in carrying out the duties and

exercising the powers of the liquidator and the

remuneration of the liquidator;


(b) the reasonable costs of a person who applied to the

Court for an order that the company be put into

liquidation, including the reasonable costs of a

person appearing on the application whose costs

are allowed by the Court;

(c) the actual out-of-pocket expenses necessarily

incurred by a liquidation committee.

17. Second priority claims – (1) After paying the claims

referred to in clause 16, the liquidator must next pay the

following claims:

Employees’ wages or salary

(a) subject to sub-clause (2), all wages or salary of any

employee, whether or not earned wholly or in

part by way of commission, and whether payable

for time or for piece work, in respect of services

rendered to the company during the 4 months

before the commencement of the liquidation;

Employees’ annual leave

(b) subject to sub-clause (2), paid annual leave

becoming payable to an employee (or if the

employee has died, to any other person in the

employee's right) on the termination of the

employment before or by reason of the

commencement of the liquidation;

Accident compensation

(c) amounts due in respect of any compensation or

liability for compensation under the Law Reform

Act 1964 or Accident Compensation Act 1986

accrued before the commencement of the

liquidation;

Amounts deducted by company

from employees’ wages or salary

(d) subject to sub-clause (2), amounts deducted by the

company from the wages or salary of an

employee in order to satisfy obligations of the

employee;

Amounts payable under Maintenance

Affiliation Act 1967

Companies Act 2001

(e) subject to sub-clause (2) of this clause, amounts

payable under section 37 of the Maintenance

Affiliation Act 1967;

Preferential claims under section 250

(f) amounts that are preferential claims under section

250 of the Act;

Amounts payable to apprentices

(g) any amount payable to an apprentice by virtue of

the Apprenticeship Act 1972, who is deprived of

employment by reason of the commencement of

the liquidation;

National Provident Fund contributions

(h) any contributions payable by the company under

section 16(1) of the National Provident Fund Act

1972;

Priority payments under other enactments

(i) all sums that by any other enactment are required to

be paid under the priority established by this

clause;

Workers’ compensation

(j) unless the company is being liquidated merely for

the purposes of reconstruction or of

amalgamation with another company, or unless

the company has at the commencement of the

liquidation under such a contract of insurance

rights capable of being transferred to and vested

in the worker, all amounts due in respect of any

workers compensation or liability for workers

compensation accrued before the relevant date.

(2) The total sum to which priority is to be given under sub-

clause (1)(a), (b), (d), or (e) must not, in the case of any 1

employee exceed $3,000 or any greater amount that is

prescribed at the commencement of the liquidation.

(3) If a payment has been made to the following persons

out of money advanced by some person for that purpose, the

person by whom the money was advanced has, in a liquidation,

the same right of priority in respect of the money advanced as

the employee, or other person receiving the payment in right of

the employee, would have if the payment had not been made:

(a) an employee of a company on account of wages or

salary:


(b) any such employee or, if the employee has died, to

any other person in the employee’s right, on

account of holiday pay.

18. Third priority claims – After paying the sums referred

to in clause 17, the liquidator must next pay the following to the

extent that the amount is for the time being unpaid to the

Commissioner of Inland Revenue or to the Comptroller of

Customs, as the case may require:

Income tax

(a) tax payable by the company in the manner required

by the Tax Administration Act 2012;

Tax deductions

(b) tax deductions made by the company under the Tax

Administration Act 2012;

Non-resident withholding tax,

(c) non-resident withholding tax deducted by a company

on behalf of an agent, absentee or non-resident

under the Income Tax Act 2012;

Resident withholding tax

(d) a resident withholding tax deduction made by a

company under the Income Tax Act 2012;

Customs and excise duty

(e) duty payable within the meaning of section 2 of the

Customs Act 2014 and excise duty payable

under Part 5 of the Excise Tax (Domestic

Administration) Act 1984 and section 5 of the

Excise Tax (Import Administration) Act 1984.

19. Ranking of claims in clauses 17 and 18 – (1) The

claims listed in each of clauses 17 and 18:

(a) rank equally among themselves and must be paid in

full, unless the assets are insufficient to meet

them, in which case they abate in equal

proportions; and

(b) so far as the assets of the company available for

payment of general creditors are insufficient to

meet them, have priority over the claims of

persons in respect of assets that are subject to a

floating charge and must be paid accordingly out

of those assets.

Companies Act 2001

(2) To the extent that the claims to which subclause (1)

applies are paid out of assets referred to in paragraph (b) of that

sub-clause, the amount so paid is an unsecured debt due by the

company to the secured party.

20. When landlord or other person has distrained on

goods, etc., – If a landlord or other person has distrained on

goods or effects of the company within the month before the

commencement of the liquidation:

(a) the claims to which priority is given by this Part are

a first charge on the goods or effects so

distrained on, or the proceeds from their sale; but

(b) if any money is paid to a claimant under any such

charge, the landlord or other person has the same

rights of priority as that claimant.

PART 4

MUTUAL CREDIT AND SET-OFF

21. Definitions – In this Part:

“related person” includes a related company or a director of

the company in liquidation






and







was made; and



commencing on the date of the making of an


time of the commencement of the liquidation

if—


(i) the application was made to the Court to put









the liquidator is appointed






and







was made; and



commencing on the date of the making of an



(i) the application was made to the Court to put










22. Mutual credit and set-off – If there have been mutual

credits, mutual debts, or other mutual dealings between a

Companies Act 2001

company and a person who seeks or, but for the operation of

this clause, would seek to have a claim admitted in the

liquidation of the company:

(a) an account must be taken of what is due from the 1

party to the other in respect of those credits,

debts, or dealings; and

(b) an amount due from 1 party must be set off against

an amount due from the other party; and

(c) only the balance of the account may be claimed in

the liquidation, or is payable to the company, as

the case may be.

23. Proof for person who is not related person – Unless

the person proves that, at the time of the transaction or

assignment, the person did not have reason to suspect that the

company was unable to pay its debts as they became due, a

person who is not a related person is not entitled to claim the

benefit of a set-off arising from:

(a) a transaction made within the specified period,

being a transaction by which the person gave

credit to the company or the company gave

credit to the person; or

(b) the assignment within the specified period to that

person of a debt owed by the company to another

person.

24. Proof for person who is related person – Unless the

related person proves that, at the time of the transaction or

assignment, the related person did not have reason to suspect

that the company was unable to pay its debts as they became

due, the related person is not entitled to claim the benefit of a

set-off arising from:

(a) a transaction made within the restricted period,

being a transaction by which the related person

gave credit to the company or the company gave

credit to the related person; or

(b) the assignment within the restricted period to that

person of a debt owed by the company to another

person.


25. Exception for amounts paid or payable by

shareholder – Clauses 22 to 24 do not apply to an amount paid

or payable by a shareholder or former shareholder:

(a) as the consideration, or part of the consideration,

for the issue of a share; or

(b) in satisfaction of a call in respect of an outstanding

liability of the shareholder made by the directors

or by the liquidator.

PART 5

SET-OFF UNDER NETTING AGREEMENT

26. Definitions – In this Part, unless the context otherwise

requires:

“bank” means the Central Bank of Samoa;

“bilateral netting agreement” means an agreement that

provides, in respect of transactions between 2 persons to

which the agreement applies:

(a) that on the occurrence of an event specified in the

agreement, all or any of those transactions must

(or may, at the option of a party) be terminated

and—

(i) an account taken of all money due between

the parties in respect of the terminated

transactions; and

(ii) all obligations in respect of that money

satisfied by payment of the net amount

due from or on behalf of the party having

a net debit to or on behalf of the party

having a net credit; or

(b) that each transaction is to be debited or credited to

an account with the effect that the rights and

obligations of each party that existed in respect

of the relevant account before the transaction are

extinguished and replaced by rights and

obligations in respect of the net debit due on the

relevant account after taking into account that

transaction; or

(c) that amounts payable by each party to the other

party are to be paid or satisfied by payment of

the net amount of those obligations by the party

Companies Act 2001

having a net debit to the party having a net

credit, but does not include any bilateral netting

agreement that is part of a multilateral netting

agreement;

“clearing house” means a person that provides clearing or

settlement services in respect of financial transactions

between parties to a multilateral netting agreement;

“multilateral netting agreement” means an agreement that

provides for the settlement, between more than 2

persons, of payment obligations arising under

transactions that are subject to the agreement, and that

provides, in respect of transactions to which it relates,

that debits and credits arising between the parties are to

be brought into account so that amounts payable by or to

each party are satisfied by:

(a) payment by or on behalf of each party having a net

debit to or on behalf of a clearing house (whether

as agent or as principal) or a party having a net

credit; and

(b) receipt by or on behalf of each party having a net

credit from or on behalf of a clearing house

(whether as agent or as principal) or a party

having a net debit;

“netted balance” means any amount calculated under a

netting agreement as the net debit payable by or on

behalf of a party to the agreement to or on behalf of

another party to the agreement in respect of all or any

transactions to which the netting agreement applies;

“netting agreement” means a bilateral netting agreement or

a recognised multilateral netting agreement;

“recognised clearing house” means a clearing house

declared under clause 36 to be a recognised clearing

house;

“recognised multilateral netting agreement” means a

multilateral netting agreement that is contained in, or is

subject to, the rules of a recognised clearing house.

27. Application – (1) Despite anything in section 251 of the

Act, clauses 26 to 40 apply:

(a) to a netting agreement –

(i) made in or evidenced by writing; and


(ii) in which the application of clauses 26 to 40

has not been expressly excluded; and

(iii) whether made before or after the

commencement of this clause; and

(b) to all obligations under a netting agreement

(whether those obligations are payable in the

currency of Samoa or in some other currency).

(2) Clauses 26 to 40 apply despite:

(a) any disposal of rights under a transaction that is

subject to a netting agreement in contravention

of a prohibition in the netting agreement; or

(b) the creation of a charge or other interest in respect

of the rights referred to in paragraph (a) in

contravention of a prohibition in the netting

agreement.

(3) Nothing in clauses 26 to 40 applies to an amount paid or

payable by a shareholder or former shareholder:

(a) as the consideration, or part of the consideration,

for the issue of a share; or

(b) for a company registered under the Companies Act

1955, in satisfaction of a call in respect of an

outstanding liability of the shareholder made by

the directors of directors or by the liquidator.

28. Calculation of netted balance – If a company that is a

party to a netting agreement is in liquidation:

(a) any netted balance payable by or to the company

must be calculated in accordance with the netting

agreement; and

(b) that netted balance constitutes the amount that may

be claimed in the liquidation or is payable to the

company, as the case may be, in respect of the

transactions that are included in the calculation.

29. Bilateral netting agreements mutuality – Clauses 26

to 40 apply to transactions that are subject to a bilateral netting

agreement only if those transactions constitute mutual credits,

mutual debts, or other mutual dealings.

30. Recognised multilateral netting agreements:

mutuality – (1) Clauses 26 to 40 apply to transactions that are

Companies Act 2001

subject to a recognised multilateral netting agreement, whether

or not those transactions constitute mutual credits, mutual debts,

or other mutual dealings.

(2) Despite sub-clause (1), clauses 26 to 40 do not apply to

transactions that are subject to a recognised multilateral netting

agreement if:

(a) those transactions do not constitute mutual credits,

mutual debts, or other mutual dealings; and

(b) a party to any of those transactions is acting as a

trustee for another person; and

(c) the party acting as trustee is not authorised by the

terms of the trust of which the party is a trustee

to enter into the transaction.

31. Application of set-off under Part 4 – (1) Part 4 does

not apply to transactions that are subject to a netting agreement

to which this Part applies.

(2) However, a netted balance is to be treated as an amount

to which clause 22 applies if the company that is in liquidation

and the other party to the netting agreement also have mutual

credits, mutual debts, or other mutual dealings between them

that are not subject to the netting agreement.

32. Transactions under netting agreements – (1) Nothing

in clauses 26 to 40 prevents the operation of section 29 of the

Act or Schedule 17 in respect of a transaction that is subject to a

netting agreement.

(2) However, nothing in clause 2(3) of Schedule 17 applies

to a transaction that is subject to a netting agreement.

(3) For the purposes of Schedule 17, transaction, in relation

to a company, does not include a netting agreement entered into

by the company, except to the extent that the effect of entering

into the netting agreement is to reduce any amount that was

owing by or to the company at the time the company entered

into the agreement.

33. Effect of liquidation on rights under netting

agreement – Nothing in Schedule 15 affects, in respect of a

company in liquidation, the exercise of any of the following

rights under a netting agreement:


(a) the termination, in accordance with the netting

agreement, of all or any transactions that are

subject to the netting agreement by reason of the

occurrence of an event specified in the netting

agreement, being an event (including the

appointment of a liquidator) occurring not later

than the commencement of the liquidation;

(b) the taking of an account, in accordance with the

netting agreement, of all money due between the

parties to the netting agreement in respect of

transactions affected by the termination.

34. Effect of notice – The filing of a notice under clause 8

of Schedule 17 in respect of any transaction that is subject to a

netting agreement does not affect the operation of clause 28 in

respect of the transaction, and that clause continues to apply to

the transaction until the transaction is set aside.

35. Court may set aside certain bilateral netting

agreements – (1) The Court may order, on the application of a

liquidator, that a bilateral netting agreement entered into by a

company, be set aside as against the liquidator of the company

if:

(a) the netting agreement is between the company and

a person who was a related person at the time

that the netting agreement was entered into; and

(b) the netting agreement was entered into within the

restricted period; and

(c) the related person does not prove that, at the time

the netting agreement was entered into, the

related person did not have reason to suspect that

the company was unable to pay its debts as they

became due.

(2) The Court may make any other orders it thinks proper

for the purpose of giving effect to an order under subclause (1).

(3) In this clause:

“related person” in relation to the company in liquidation,

means:

(a) a director of the company, or a nominee or relative



Companies Act 2001

(b) a person, or a relative of a person, who has control

of the company; or

(c) another company that is controlled by a director of

the company, or a nominee or relative of or a

trustee for, or a trustee for a relative of, a director

of the company; or

(d) a related company;

“restricted period” has the same meaning as in clause 21.

36. Recognised clearing houses – (1) The Bank may, by

public notice, declare any person that provides or proposes to

provide clearing or settlement services to be a recognised

clearing house for the purposes of clauses 26 to 40.(2) The

Bank may, by public notice, vary or revoke any declaration

made under sub-clause (1).

37. Matters for bank to consider – (1) In determining

whether a declaration should be made, varied, or revoked, the

Bank must consider the extent to which the application of

clauses 26 to 40 to any multilateral netting agreement that is

subject to the rules of that clearing house would assist in

promoting the soundness or efficiency of the financial system.

(2) In determining whether a declaration should be made,

varied, or revoked, the Bank may consider any of the following

matters:

(a) the type of transactions that may be effected

through the clearing house; and

(b) any laws or regulatory requirements relating to the

operation of that clearing house and compliance

with those laws or regulatory requirements; and

(c) any other matters that the Bank may, in any

particular case, consider appropriate.

38. Bank may impose conditions – (1) The Bank may, in

any declaration made or varied under clause 36, impose

conditions relating to any of the matters referred to in clause 37.

(2) If a recognised clearing house fails to comply with any

conditions referred to in sub-clause (1), the Bank may revoke

the declaration made under clause 36 that relates to the clearing

house.


39. Bank to notify recognised clearing house – The Bank

must not revoke or vary a declaration made under clause 36

unless:

(a) the recognised clearing house to which the notice

applies has been given not less than 5 working

days’ notice in writing of the Bank’s intention to

do so; and

(b) the clearing house has had a reasonable opportunity

to make submissions to the Bank; and

(c) the Bank considers those submissions.

40. Effect of variation or revocation of declaration – The

variation or revocation of a declaration under clause 36 does not

affect the application of sections 26 to 40 to any transaction:

(a) that is or was subject to a recognised multilateral

netting agreement; and

(b) that was entered into before the variation or

revocation of the declaration.

PART 6

MISCELLANEOUS

41. Interest on claims – (1) The amount of a claim may

include interest up to the date of commencement of the

liquidation:

(a) at such rate as may be specified or contained in any

contract that makes provision for the payment of

interest on that amount; or

(b) in the case of a judgment debt, at such rate as is

payable on the judgment debt.

(2) If any surplus assets remain after the payment of all

admitted claims, interest must be paid at the prescribed rate on

those claims from the date of commencement of the liquidation

to the date on which each claim is paid, and if the amount of the

surplus assets is insufficient to pay interest in full on all claims,

payment must abate rateably among all claims.

(3) If any surplus assets remain after the payment of interest

in accordance with sub-clause (2), interest must be paid on all

admitted claims referred to in sub-clause (1) from the date of

commencement of the liquidation to the date on which the claim

is paid at a rate equal to the excess between the prescribed rate

Companies Act 2001

and the rate referred to in sub-clause (1)(a), as the case may be,

and, if the amount of the surplus assets is insufficient to pay

interest in full on all claims, payment must abate rateably

among all claims.

(4) For the purposes of this clause, prescribed rate means the

prescribed rate for interest on judgment debts within the

meaning of the Supreme Court (Civil Procedure) Rules made

under the Judicature Ordinance 1961.

42. Trade discounts – A creditor making his or her claim

must deduct all trade discounts that he or she would otherwise

have given if the company had not gone into liquidation.

43. Periodical payments – (1) When any payment

(including rent) falls due at stated periods, and liquidation

commences at any time other than at the beginning of 1 of those

periods, the persons entitled to the payment may claim up to the

date of commencement of liquidation as if the payment accrued

on a daily basis.

(2) Nothing in sub-clause (1) affects the right of the lessor

of the property to claim rent that accrues on or after the

commencement of liquidation.

44. Employees’ claims – (1) A person may make a claim on

behalf of all or a number of employees of the company.

(2) A schedule setting out the names of the employees, and

the amounts due to each of them, must be attached to the claim.

(3) A claim made under this rule has the same effect as if

separate claims had been made by each of the employees.

45. Notice to creditors to claim – (1) Subject to the Act,

and unless otherwise ordered by the Court, the liquidator may

fix a certain day, which must not be less than 10 working days

from the date of the notice, on or before which the creditors of

the company are to make their claims, and to establish any

priority their claims may have under Part 3.

(2) The liquidator must give public notice of the day fixed

under sub-clause (1).

46. Failure to claim by day fixed for claims – (1) Subject

to sub-clause (2), any creditor who fails to make a claim on or


before the day fixed under clause 45 will be excluded from the

benefit of any distribution made before his or her claim is made.

(2) A creditor who makes a claim after the day fixed under

clause 45 and whose claim is admitted is entitled to receive the

benefit of any distribution from which the creditor was

previously excluded if any assets remain, or, in the opinion of

the liquidator, are likely to remain, available for distribution.

47. Failure to establish priority by day fixed for claims –

(1) Subject to sub-clause (2), any creditor who fails to establish

any priority that the creditor’s claim may have on or before the

day fixed under clause 45 must be excluded from objecting to

any distribution made before the priority of that claim is

established.

(2) The liquidator may, in making any distribution after the

claim is admitted, make an assumption as to the priority that the

claim may have and accord the creditor the benefit of the

distribution accordingly.

(3) A creditor who establishes the priority of the creditor’s

claim after the day fixed under clause 45 is entitled to receive

the benefit of any distribution from which the creditor was

previously excluded (if any) if any assets remain, or, in the

opinion of the liquidator, are likely to remain, available for

distribution.

48. Dividends in respect of rejected claims – (1) If any

creditor applies to the Court for an order reversing or modifying

the decision of a liquidator to reject the creditor’s claim, the

liquidator may in any such case make provision for the dividend

on the claim, and the probable cost of the application in the

event of the claim being admitted.

(2) If no notice of an application has been given within the

time specified in the Supreme Court Rules for appeals to the

Court, the liquidator must exclude all claims that have been

rejected from participation in the dividend.

49. Costs of proceedings relating to liquidator’s decision

on claim – If any creditor applies to the Court for an order

reversing or modifying the decision of a liquidator to reject the

creditor’s claim, the Court may, if it thinks fit:

Companies Act 2001

(a) allow any costs of any creditor to be added to the

creditor’s claim;

(b) allow any costs of any party to be paid out of the

assets of the company, such costs being deemed

to be expenses of the liquidator;

(c) order any costs to be paid by any party to the

proceedings other than the liquidator.

SCHEDULE 19

(Sections3(i)and 292)

LIQUIDATION OF ASSETS OF OVERSEAS

COMPANIES

1. Modified application of Division 3 of Part 9 –

Division 3 of Part 9 applies to the liquidation of the assets in

Samoa of an overseas company, with the following

modifications and exclusions:

(a) references to assets are to be taken as references to

assets in Samoa;

(b) references to a company are to be taken as

references to an overseas company;

(c) references to removal from the Samoa register are

to be taken as references to ceasing to carry on

business in Samoa;

(d) the following provisions do not apply to such a

liquidation—

(i) clause 6 of Schedule 13;

(ii) clauses 1 and 3 of Schedule 15;

(e) clause 2 of Schedule 15 does not affect the tenure

of directors of an overseas company, but the

overseas company and its directors cease to have

any powers, functions, or duties in relation to the

company’s assets in Samoa, other than those

required or permitted to be exercised by Division

3 of Part 9;

(f) section 253 of the Act applies to such a liquidation,

but instead of making the statement required by

subsection (1)(b)(iii) of that section, the

liquidator must state that the company has ceased


to carry on business in Samoa and is ready to be

removed from the overseas register.

2. Rights of action not affected – Nothing in this Act

excludes the right of a creditor of an overseas company in

relation to the assets of which a liquidator has been appointed:

(a) to bring proceedings outside Samoa against the

overseas company in relation to a debt not

claimed in the liquidation or the balance of a

debt remaining unpaid after the completion of a

liquidation; or

(b) to bring an action in Samoa in relation to the

balance of a debt remaining unpaid after the

completion of a liquidation.

REVISION NOTES 2008 – 2017

This is the official version of this Act as at 31 December 2017.

This Act has been revised by the Legislative Drafting Division from 2008 to

2017 respectively under the authority of the Attorney General given under

the Revision and Publication of Laws Act 2008.

The following general revisions have been made:

(a) Amendments have been made to conform to modern drafting styles

and to use modern language as applied in the laws of Samoa;

(b) Insertion of the commencement dates (this Act and section 351);

(c) Subparts have been changed to Divisions and unnumbered headings

have been renumbered into Divisions and Sub-divisions and

different fonts used to clearly distinguished them from the main

Parts;

(d) Other minor editing has been done in accordance with the lawful

powers of the Attorney General.

(i) “Every” and “any” changed to “a” or “each” where

appropriate

(ii) Present tense drafting style:

o “shall be” changed to “is” and “shall be deemed” changed to

“is taken”

o “shall have” changed to “has”

o “from time to time” removed

(iii) Offence provisions

o “shall be guilty” changed to “commits”

o where appropriate “commits” changed to “is convicted”

(iv) Removal/replacement of obsolete and archaic terms with

plain language

Companies Act 2001

o “notwithstanding” changed to “despite”

o “pursuant to” and “in accordance with” changed to “under”

o “in the case of” changed to “for”

(v) Numbers in words changed to figures

(vi) Removal of superfluous terms

o “”the generality of” removed

o “and of no effect” after “void”

(vii) References to Income Tax Act 1974 and the Income Tax

Administration Act 1974 updated to the Income Tax Act

2012 and the Tax Administration Act 2012

(viii) Roman numeral numbering of Parts changed to decimal

numbers.

The following amendments were made to this Act since the publication of

the Consolidated and Revised Statutes of Samoa 2007:

By the Personal Property Securities Act 2016, (No. 5), commencing on 27

February 2017:

Section 155 substitute new section;

Section 325 for subsection (1), paragraph (c) is repealed;

subsection (2) is repealed;

Schedule 1 substitute definition of “registered charge” with new

definition;

Schedule 7 is repealed.

Lemalu Hermann P. Retzlaff

Attorney General of Samoa

This Act is administered by

the Ministry of Commerce, Industry and Labour

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